Memory device controller suppliers such as Phison Electronics and Silicon Motion Technology are still facing unfavorable macroeconomic conditions as the NAND flash memory industry continues to face oversupply and turbulence. Despite the near-term challenges driving down NAND flash prices, the outlook for memory content per box and demand from non-consumer as well as emerging device applications remains positive, according to market sources.
Phison has been aggressively developing its products for high-end device applications in an effort to shift its attention away from consumer electronics products, the sources indicated. Sales generated from the consumer electronics sector have slid as a proportion of company revenue to 20%.
Phison was among the first suppliers capable of providing PCIe Gen4 SSD controllers, the sources said. The company saw its total PCIe SSD controller shipments increase over 14% in 2022, despite a 3.7% decline in revenue for the year.
Phison is gearing up for the industry's transition to the faster PCIe Gen5 interface. The flash controller specialist is collaborating with vendors such as AMD and Micron Technology to promote PCIe Gen5 SSDs this year, with a focus on demand opportunities in the server and HPC sectors, the sources indicated.
Furthermore, 2023 will be the first year in which Phison's enterprise SSD shipments will increase, according to the sources. The flash controller supplier is expanding its enterprise storage operation in the US.
Phison has established a system integration and technology research and development center in Broomfield, Colorado, to be closer to its local customers and partners, and has formed a strategic alliance with Seagate since the second quarter of 2022. The company is expected to see its enterprise SSD controller shipments contribute substantially to revenue in 2024, the sources said.
Fellow flash device controller company Silicon Motion is in the process of being acquired by MaxLinear. The deal, which is still subject to approval from China's authorities, is expected to close in the second part of this year, the sources said.
Silicon Motion's acquisition by MaxLinear will provide chances for growth, the sources indicated. MaxLinear continues to enhance its deployments in the automotive and optical fiber infrastructure fields, and merging with MaxLinear will benefit Silicon Motion in terms of economic scale growth, upstream wafer purchase bargaining, and business integration and complementarity.
Silicon Motion's SSD controller shipments decreased 5-10% in 2022, which still outperformed the total PC market, thanks to strong demand for PCIe Gen4 devices, the sources said. The flash controller specialist is collaborating with vendors such as Micron and SK Hynix.
Silicon Motion is expected to see its share of the PCIe Gen4 SSD controller market expand in 2023, as upgrades to the PCIe Gen4 interface will be spurred by the availability of new-generation CPUs, according to the sources. The company also will start delivering samples for PCIe Gen5 SSDs in the first half of 2023, with volume production slated for the end of the year.
In addition, Silicon Motion has cut into the supply chain for Toyota's China-bound cars and is also looking to enter more global auto vendors' supply chains, the sources said. The company is expected to see sustained revenue growth from orders for automotive storage applications over the next couple of years.
Article translated by Jessie Shen
