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Monday, March 12, 2018
SSD Price Drop Will Drive the Adoption Rate of SSD in Notebooks


For 1Q18, the average contract prices of mainstream Client SSD for PC OEMs are estimated drop by 3-5% in SATA-SSD sector and 4-6% in PCIe-SSD sector compared with the previous quarter.

In 1Q18, the traditional off-season, SSD market has seen obviously less stock up orders from PC OEMs compared with 4Q17, according to DRAMeXchange, a division of TrendForce. SSD suppliers have cut prices to enhance PC OEMs' willingness to adopt their new 64/72-layer 3D-SSD products. This will indicate the stop of continuous price rise over the past year.

For the 2Q18, SSD suppliers will continue to expand their capacity of 64/72-layer 3D SSD, but the growth momentum of demand remains weak, resulting in slight oversupply of SSD. DRAMeXchange expects that the contract prices of mainstream SSD products will continue to decline in the second quarter.

Alan Chen, research director at DRAMeXchange, points out that PC OEMs were more conservative than the original purchasing plan in 2H17 due to soared SSD prices. "As the result, the average adoption rate of SSD in notebooks was only 45% in 2017, lower than original expectation", says Chen, "this figure is expected to go beyond 50% this year as the SSD prices drop." In addition, the decline in SSD contract prices will also drive the mainstream capacity of SSD in PC OEM market to 256GB. But 512GB products will not become the mainstream until 2019 or 2020 because the prices of this specification will be not able to reach the sweet spot this year.

In terms of notebook SSD interfaces, PCIe SSD has a much better performance than SATA III SSD, but still had a lower-than-expected penetration rate of 30% in 2017 since it is less cost-effective than SATA III SSD. Therefore, the latter one remained the mainstream in Client SSD market. In 2018, however, DRAMeXchange expects the penetration rate of PCIe SSD will rise quickly, with a chance to reach 50%. This is because Intel CPU platforms have provided wider support to PCIe SSD, maturing 3D-SSD technology has lowered the costs, and SSD controller chip makers have launched more cost-effective solutions.

Furthermore, suppliers including SK Hynix, WD/Toshiba, Micron, and Intel, have all put 64/72-layer SSD products into mass production since 1Q18, so the penetration rate of 3D-TLC architecture in Client SSD market has a chance to reach 70% in 2018. For long term, NAND Flash manufacturers are currently developing 3D-QLC Flash technology, which can achieve higher capacity in single chip with more competitive costs. It is expected to enter mass production in the second half of 2018 at the earliest. Once this technology goes mature, SSD devices will be more cost-effective, and it will be faster for SSD to replace HDD.

Intel has started to ship 3D Xpoint SSD products to PC OEM market since 2017, and also launched new products of 280/480GB in the channel market. However, these products are only adopted in high-end business market and gaming PC market due to the low performance-cost ratio. Whether the penetration rate could rise in the future still depends on the pricing strategy of Intel.



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