AI Demand Boosts, Full-Year Shipments of QLC Enterprise SSD Surge Rapidly in 2024

As energy efficiency becomes a priority for AI inference servers, North American customers are expanding their orders for storage products, driving demand for QLC Enterprise SSDs to begin climbing. However, currently only Solidigm and Samsung have verified QLC products, so this wave of demand will benefit Solidigm the most as it actively promotes QLC products. According to TrendForce estimates, full-year shipments of QLC Enterprise SSDs are expected to reach 30EB (Exabytes) in 2024, a fourfold increase from 2023.

TrendForce believes that there are two main reasons for the adoption of QLC SSDs in AI applications: read speed and Total Cost of Ownership (TCO) advantages. As AI inference servers primarily focus on reading, with less frequent data writes compared to AI training servers, QLC Enterprise SSDs outperform HDDs in read speed, and their capacity has developed to 64TB.

Furthermore, currently, the mainstream capacity of HDDs used in general-purpose servers is 20-24TB, while a single QLC Enterprise SSD (64TB) not only saves power compared to HDDs but also reduces the space required for storage capacity, significantly lowering TCO costs. As AI training has become a power-intensive application, energy efficiency will become a priority consideration for storage products, making large-capacity QLC Enterprise SSDs the preferred solution for many AI customers.

With few QLC SSD suppliers available, Enterprise SSD contract prices are expected to continue rising into the third quarter.

According to TrendForce research, Samsung's market share in Enterprise SSDs exceeded 40% in the fourth quarter of 2023, while Solidigm, with its long-term cultivation of QLC Enterprise SSDs, has a combined market share of 32% within the SK Group. Other suppliers, limited by their low market share in Enterprise SSDs, have limited growth in orders. In terms of capacity planning, benefiting from the growth in QLC orders, Solidigm will expand its 144-layer production in the second half of the year, while Samsung will focus on 176-layer production. Without other absolute competitors, the tight supply of large-capacity QLC products will continue to drive up Enterprise SSD contract prices into the third quarter, with an estimated quarterly increase of about 5-10%.

For other end demand observations, NAND Flash inventory for PC and smartphone customers continues to rise. Corresponding products such as Client SSDs, eMMC, and UFS have rebounded by more than 60% from their lows in the short term. However, with demand lagging behind, the momentum for further price increases will slow down. Module manufacturers are starting to sell NAND Flash wafers at prices below contract prices in the spot market to reduce inventory, further exerting pressure on prices. TrendForce believes that as NAND Flash suppliers still plan to increase capacity utilization in the second half of the year, quarterly contract prices for consumer-grade products will be difficult to increase, and the overall performance of NAND Flash quarterly contract prices will be weaker than that of Enterprise SSDs.