Seagate Joins Hands With SK Hynix in Tapping SSD Market

14 Dec

Following the merger Western Digital (WD), the leading SSD supplier worldwide, with SanDisk, a major flash-memory supplier, Seagate, the second largest SSD supplier, has joined hands with SK Hynix in setting up a joint venture, as both of them are poised to tap the fast-expanding SSD memory market.

TechNews reports, citing insiders, that the new outfit, which is expected to be publicized soon, will a 49:51 joint venture between Seagate and SK Hynix, producing enterprise SSD initially before extending to the client sector for PCs and notebook PCs.

SSD boasts more power saving and higher speed than traditional HDD. Thanks to the high performance-price ratio, it has witnessed ever higher market penetration rate, prompting many HDD firms to switch to the sector. As a result, WD and Seagate have allied with SanDisk and SK Hynix, respectively, in order to secure supply of NAND Flash, a key material for SSD, which has been strained by growing demand.

The switch coincides with the slackening sales of HDD. In the first quarter, for instance, HDD shipment of Seagate dropped 20% year-on-year to less than 40 million units, a record low in recent years. Due to the business contraction, Seagate announced a corporate restructuring in midyear, laying off 1,600 employees.

On the other hand, SK Hynix aims to boost its meager share on the SSD market, 4% for the client sector and less than 2% for the enterprise sector, via the alliance with Seagate. Presently, Intel and Samsung both boast 30% share for enterprise SSD, while for client SSD Samsung is the champion, garnering 30% share.


Share of client-SSD market in Q3 2016

Source: TrendForce

Market players are watching closely how will the WD/San Disk and Seagate/SK Hynix joint ventures affect the SSD market, as well as the supply of NAND Flash.

DRAMeXchange, under the TrendForce, a market information body, predicted previously that rates of enterprise or client notebook PCs furnished with SSD will beat expectation in the second half of 2016. The rate of notebook PCs with SSD is set to top 30% for entire 2016, which will rise to over 50% in 2017-2018.

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