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“Our high-end controller is selling very well, including PCIe 4.0 and PCIe 5.0 controllers, UFS 3.1 and eMMC 4.1,” Nelson Duann, senior vice president of Silicon Motions' client business unit, said in an interview with Tom’s Hardware . “But the low-end part [of the business is suffering as] consumer demand going down. But as ASP [of high-end controllers] is higher, it compensates [dropping sales of lower-end controllers]. So that is why our revenue momentum is still going up.”
Indeed, Silicon Motion’s first quarter sales were $342.1 million, up 23% quarter-over-quarter and 105% year-over-year, with sales of SSD controllers up 40% – 45% YoY. Apparently, the company managed to increase sales of both consumer and enterprise-grade controllers. In the latter case, the company ramped up shipments of its PCIe 5.0 SSD controllers as demand from the data center segment was particularly high.
But while demand from AI and cloud sectors is not going anywhere and the company is probably going to sell a boatload of enterprise-grade SSD controllers, the biggest question about client applications is whether NAND memory supply constraints are going to ease anytime soon. Apparently, they are not; they are going to get worse.
“For the second half of this year, I expect the situation to remain largely unchanged; supply will stay very tight,” Duann said. “2027 is going to be the worst [from NAND supply perspective]. […] Looking ahead to next year, NAND makers are very pessimistic. They tell us supply conditions will become even worse because CSPs and data center operators continue to increase their demand. As a result, NAND suppliers have little choice but to focus their allocation on the data center market.”
Phison CEO says that NAND prices hiked by around 50% overnight, highlighting severe shortage in the industry
DRAM prices predicted to jump 63% in Q2, NAND up to 75% — follows 95% jumps in Q1, Trendforce says AI server demand keeps supply tight
New Silicon Motion SM2524XT chip brings 14 GB/s to mainstream SSDs
Key considerations
- Investor positioning can change fast
- Volatility remains possible near catalysts
- Macro rates and liquidity can dominate flows
Reference reading
- https://www.tomshardware.com/pc-components/ssds/SPONSORED_LINK_URL
- https://www.tomshardware.com/pc-components/ssds/silicon-motion-increases-sales-of-ssd-controllers-amid-nand-shortage-but-expects-nand-shortages-to-get-worse-in-2027-supply-conditions-will-become-even-worse#main
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