The rapid development of AI has had a massive impact on global industries. The emergence of innovative technologies such as generative AI and machine learning has not only enhanced the performance of devices like smartphones, PCs, data centers, automotive systems, and industrial applications but has also spurred the demand for high-performance storage solutions in the market. Whether used for AI training or inference, the most crucial aspect is data. Swiftly acquiring the necessary data, securely storing data generated through AI training or inference, and properly protecting it is a vital issue within the entire AI ecosystem. In response to this trend, Silicon Motion, the world's largest NAND Flash controller supplier, has a comprehensive product layout and market strategy in place to help customers seize this immense business opportunity.
Recently, storage technology has gained significant market attention. Wallace Kou, President and CEO of Silicon Motion, identified five major driving factors. Firstly, the rapid development of AI technology, as mentioned earlier, has led to a surge in storage demand. Secondly, the expansion of AI application scenarios necessitates storage systems that provide high-speed data access, large storage capacity, and a stable and reliable operating environment. Thirdly, with the widespread adoption of AI applications, users place greater emphasis on protecting sensitive data, requiring storage systems with more sophisticated data encryption and access control mechanisms to ensure data security. Fourthly, storage technology continues to advance, including innovations such as QLC NAND, NVMe protocol, PCIe Gen5, providing new solutions to AI storage challenges. Finally, the continuous increase in storage performance and capacity demands in areas such as data centers and cloud services, driven by applications like AI and big data, further expand the market space for high-performance and large-capacity enterprise storage solutions.
Rise of AI Edge Devices Demands Progressive Functionality in Storage Components
Wallace Kou further elaborated on the current market trends and changes in demand for storage components. He mentioned that current AI applications still heavily rely on the high computational capabilities of data centers and cloud servers to process large language models, leading to a significant surge in demand for High Bandwidth Memory (HBM). However, with considerations for cost reduction, system latency reduction, and enhanced privacy protection, AI applications have started transitioning from cloud platforms to personal computers and AI smartphones, where miniature language models run on edge devices.
In this context, edge devices must improve performance, optimize human-machine interfaces, ensure seamless operation, and prioritize storage device performance, reliability, and data security. Moreover, to accommodate the vast amount of data generated by AI applications, edge devices need to expand their capacity while also managing cost increases, underscoring the importance of QLC NAND. It's anticipated that QLC applications will expand from the current PC market to mobile phones and enterprise applications.
Another emerging trend is performance optimization. He highlighted the profound impact of data placement technology on AI performance, noting that major NAND manufacturers have recently introduced Zoned UFS, grouping similar types of data within the same storage block. For enterprise applications, ZNS and FDP technologies have adopted similar concepts, significantly enhancing read performance and extending device lifespans.
To meet the aforementioned demands, Wallace Kou believes that a comprehensive approach is needed, combining product strategy, design services, and organizational transformation to satisfy customer needs. On the product front, comprehensive customer support is essential, along with actively adopting new technologies to address market demands. Regarding design services, different application areas have varying requirements, and customers have a high demand for customized designs. Storage component suppliers must integrate advanced technology with robust firmware design capabilities to provide intelligent, efficient, and reliable storage solutions across various sectors. Lastly, enterprise organizations need to segment based on different customer applications, enhancing service quality and efficiency, focusing on delivering specialized domain products and customized services.
Silicon Motion Unleashes Three Strategies to Meet Diverse Customer Needs
Responding to the aforementioned demands, Silicon Motion has implemented a comprehensive strategy. Wallace Kou highlighted that all product lines of the company support QLC, catering to customers' requirements for high-capacity storage applications while achieving cost reduction and rapid shipping objectives. Beyond product lines, the strategic level also encompasses technical support in storage and firmware. For instance, in terms of edge devices, Silicon Motion's PCIe Gen5 SSD controller and UFS4.0 controller can fulfill the needs of AI PCs and AI smartphones with ultra-high performance and low power consumption. In enterprise storage, the MonTitan enterprise SSD development platform embraces key enterprise storage technologies like ZNS and FDP, optimizing data placement within systems. Moreover, Silicon Motion integrates its PerformaShape and NANDCommand technologies to guarantee maximum bandwidth performance and reliability, meeting the rigorous requirements of AI applications for high performance and reliability.
Regarding design services, Silicon Motion maintains long-term collaborations with major smartphone manufacturers, PC OEMs, hyperscalers, car makers, industrial product manufacturers, and other partners to deeply grasp customer pain points and requirements. This enables them to design products that align better with real-world application scenarios. Wallace Kou noted that firmware design capability stands as one of Silicon Motion's significant competitive advantages in the NAND flash controller field. Over time, they have merged advanced technology with robust firmware design capabilities to deliver intelligent, efficient, and dependable storage solutions for various sectors. Silicon Motion's firmware solutions not only boast highly optimized and stable features but also enable customized services, tailoring optimal solutions based on customer application scenarios, performance requirements, and specific needs.
Fine-tuning Organizational Structure to Enhance Firmware Customization Service Advantages
As part of its organizational restructuring, Silicon Motion has recently established two major business groups: Client & Automotive Storage (CAS) and Enterprise Storage & Display Interface Solution (ESDI) to assist customers across different industries in overcoming challenges in the AI era.
The CAS group focuses on providing solutions such as client SSD controllers, mobile controllers, Ferri embedded storage, and expandable storage controllers. Its applications primarily cover areas like PCs, smartphones, automotive, gaming consoles, and industrial applications. On the other hand, the ESDI business group concentrates on enterprise SSD controllers and display interface products, targeting markets such as data centers, servers, workstations, enterprise applications, as well as USB display and embedded GPU applications. Wallace Kou stated that a specialized organizational division of labor can help Silicon Motion efficiently meet the diverse needs of different customers, accelerate innovation, and enhance overall competitiveness. Whether in consumer, enterprise, automotive, or industrial markets, Silicon Motion can provide more professional and tailored solutions closer to the demands.
In the mobile sector, Silicon Motion has established strategic partnerships with several mobile phone manufacturers and mobile chip manufacturers to jointly develop high-performance, low-power, high-capacity storage solutions. Through firmware design capabilities and customized services, they meet specific requirements of phone manufacturers, optimizing storage performance and power consumption for AI smartphone development. In the data center domain, Silicon Motion has partnered with several major enterprise storage providers and hyperscalers in North America and China, securing commercial cooperation and providing enterprise storage solutions that meet performance and reliability demands.
Looking ahead, Wallace Kou believes that with the continuous evolution of technologies like 5G, IoT, electric vehicles, IoV, and generative AI, the demand for storage in the market will continue to expand. Silicon Motion will increase its R&D investment, leverage its competitive advantages in firmware design and customized services, closely collaborate with partners in different fields, and provide more efficient, reliable, and secure storage solutions to help customers seize vast opportunities in the AI era.