© ra2studio dreamstime.com Analysis | March 01, 2016
TrendForce expects flourishing chinese NAND Flash industry
China’s NAND Flash industry witnessed a steady growth in investments through 2015. As Chinese semiconductor companies build up their memory manufacturing capabilities at the wafer level, they are also beginning to pay greater attention to the production of controller chips for memory products.
DRAMeXchange, the memory division of global research firm TrendForce, believes that the Chinese semiconductor sector will focus on controller houses in its next phase of development due to the component’s vital position in the NAND Flash chain. “Besides pursuing the business model of selling controllers, most Chinese NAND controller houses put priority upon total SSD solutions to meet market demands,” said Sean Yang, research director at DRAMeXchange. “Enterprise storage providers, government agencies and national defense industries are target/primary customers of these products as they have been working closely with or investing in domestic controller chip suppliers. In terms of the overall product strategy, the Chinese NAND Flash industry is betting on SSD solutions using the next-generation PCIe bus (as well as the NVMe controller in particular) as the market mainstream in the near future.” Since the Chinese government committed to the development of the domestic semiconductor sector with the storage industry as the cornerstone, participants of the NAND Flash chain will now concentrate on funding, markets and product lineups. “The number of domestic NAND controller houses and other related participants will swell and the scope of product applications will extend from the enterprise to the consumer markets,” said Yang. Below is a brief analysis of several important NAND controller houses based in China. Sage Microelectronics Sage Microelectronics, listed in the Chinese stock exchange, started to attract the interests of domestic investors in 2015, when it acquired U.S.-based bridging chip marker Initio and gained crucial interface technologies (i.e. SATA, USB and SAS). With in-house controller chips and a complete product lineup, Sage is now one of the leading Chinese NAND controller houses and has a strong offering of enterprise products with SATA 2.0 interface and military-grade storage solutions. This year, Sage plans to widen its lead over its competitors by rolling out controller chips for SSDs with SATA 3.0 and PCIe interfaces. Shandong Huaxin Shandong Huaxin is one of the very few domestic controller chip and SSD suppliers that specialize in storage solutions for data security. The company’s position in the domestic market was significantly strengthened last year when its controller chips passed tests conducted by China’s State Commercial Cryptography Administration (OSCCA). Currently, Shangdong Huaxin’s main products are complete SSD solutions for businesses, government agencies, energy industry and defense industry. These SSD products use the SATA 3.0 interface and are compliant with the national encryption standard (which is based on domestic versions of algorithm security from SM1 to SM4). With a significant presence in applications that require strong security measures, Shandong Huaxin has been a strong promoter of the localization of storage equipment manufacturing. Its products are also first to become compatible with server processors from compatriot brands such as Inspur and Loongson. Memblaze Beijing-headquartered Memblaze is one of the hottest investment targets in the Chinese NAND Flash industry. The company managed to raise hundreds of millions of U.S. dollars from Qualcomm Ventures and General Technology Venture Capital during its Series C funding round. Memblaze’s strategy in the storage market is to provide highly efficient PCIe-based SSDs for enterprises. Its PBlaze 3 series, for instance, is known for their exceptional IOPS performance. The latest PBlaze 4 series, which was released last year, have also strengthened Memblaze’s position in the server and the large-scale data center markets. Among the domestic SSD makers, Memblaze is one of the few that are capable of developing data protection and encryption software for products using the NVMe controller. Shannon Systems Shannon Systems, China-based NAND controller house, was acquired by Taiwan-based Silicon Motion for US$57.5 million in 2015. The company continues to serve as a major supplier of PCIe-based SSDs. Its main clients are domestic cloud computing and data center providers, including Alibaba. The acquisition has also boosted Shanon Systems’ R&D capability, which will be directed towards the development of additional PCIe products in the near future (e.g. Enterprise-SSDs and storage arrays for clouding computing and IoT businesses). Hunan Goke Microelectronics A specialist in high-end, enterprise grade Flash solutions, Goke Microelectronics is the first domestic NAND controller house to receive backing from China’s National Integrated Circuitry Industry Investment Fund. The IC design company introduced a SSD controller chip that supports both PCIe 2.0 and SATA 3.0 interfaces this January and plans to develop eMMC products for domestically made tablets and smartphones. Huawei Aside from being a major player in China’s server and data center markets, Huawei is also pushing its semiconductor subsidiary HiSilicon to manufacture SSDs and SSD controller chips. The motivation behind the accelerated in-house effort is to improve the capability of Huawei-branded server products. Huawei launched its first SSD controller chip Hi811 in the first half of 2015. This was followed by the release of its NVMe-based SSD, the ES3600, in the second half of the year. By that time, Huawei’s controller chip already went through another upgrade, with the latest generation being the Hi812. Unlike other domestic NAND Flash solution providers, there is no pressure for Huawei to market its ware to outside clients. The Chinese electronic giant has its own server and data base businesses that support the development of controller chips and related products, and this in turn also reduces Huawei’s reliance on foreign SSD suppliers. Establishing a vertically integrated chain for server and storage equipment will furthermore enhance the competitiveness of Huawei’s products. Yang believes that the demand for Enterprise-SSDs will be stronger than Client-SSDs in the future, so Huawei’s in-house manufacturing of controller chips and storage products will have a significant impact on the entire NAND Flash industry. ----- More can be found at Trendforce.