The AI boom continues to drive growth in the tech sector, and this time, it’s pushing up prices for enterprise SSDs. The surge in demand for high-capacity SSDs, essential for AI servers, has led to an 80% price increase. This growth is being fueled by the exponential rise in data storage needs for AI applications, with companies aggressively seeking out these high-performance drives.
To meet this escalating demand, industry leaders SK hynix and its subsidiary Solidigm are prioritizing the production of enterprise-class SSDs. Both companies are focusing on scaling up their production of high-capacity SSDs using quad-level-cell (QLC) technology. QLC technology allows for 4 bits of data to be stored per cell, compared to the 3 bits stored by TLC technology, resulting in higher storage density, lower power consumption, and faster read/write speeds. This makes QLC technology ideal for ultra-high-capacity enterprise SSDs used in demanding server applications.
SK hynix, for example, is gradually increasing wafer input at its M15 production fab in Cheongju, aiming to boost monthly wafer output by around 10% by early 2025. Solidigm, which has already benefited from the increased demand, is also planning to boost production by 5% by early 2025.
Solidigm is currently the market leader in the QLC-based enterprise SSD space, offering a 60TB drive. Industry experts highlight that Solidigm’s QLC drives are optimized for high-capacity server storage and offer superior controller compatibility compared to competitor offerings. The demand for these drives has significantly exceeded supply since the second quarter of 2024.
SK hynix is further strengthening its position in this rapidly expanding market by mass-producing next-generation products, with storage capacities reaching 128TB. The company is scheduled to release 60TB QLC models in early 2025. SK hynix’s NAND marketing director emphasized the importance of enterprise SSDs during the company’s Q2 2024 earnings call, stating that the company expects enterprise SSD product sales to account for almost half of its total NAND revenue. SK hynix aims to solidify its position as one of the top two players in the rapidly growing enterprise SSD market.
