Top 3 in TrendForce’s WW 2018 Ranking of Branded SSD Module Makers

TrendForce, Inc.‘s analysis of the SSD market finds that the total WW shipments of branded SSDs bound for the channel (retail) market in 2018 reached around 81 million units, showing an increase of 50% from 2017.

Kingston Technology, ADATA Technology, and Tigo retained first, second, and third place respectively in the ranking of branded SSD module makers (excluding NAND flash suppliers) by market share for channel-market SSDs.

NAND flash suppliers (including Samsung, WDC, Micron, SK Hynix, Intel, etc.) accounted for about 35% of the total SSD shipments to the channel market in 2018. The shipment share of the dedicated SSD module makers (including brand and white-box manufacturers) for the same year came to almost 65%.

The global ranking that is presented above is based on manufacturers’ shipment market shares for channel-market SSDs. The calculation of module makers’ respective shipment volumes only takes account of SSD products under their own brands (including brands licensed from third parties). NAND flash suppliers are excluded in order to offer a better comparison of the shipment market shares of the world’s top 10 branded SSD module makers.

This analysis further finds that around 60% of the total SSD shipments to the channel market in 2018 came from the module makers in the top 10 group.

Kingston firmly held onto first place with a commanding market share of 25%. Brand recognition has been Kingston’s key advantage over the other module makers. Furthermore, Kingston has been among the top three brands by market share in USB drives and memory cards for many years. The company is thus able to leverage its strong visibility in other product segments to bolster its presence in the SSD market.

The remaining nine module makers listed in the 2018 ranking had similar market shares.

ADATA as the runner-up has also relied on its brand recognition to get ahead of its competitors in the channel market. Other factors that led to its stellar shipment performance in 2018 were its flexibility in retail pricing and its aggressive push into different regional markets including the US, Europe, Japan, and South Korea.

Third-place Tigo has been focusing mainly on China, as that country’s SSD market has been growing at a very rapid pace in the recent years. In 2018, its strategy continued to revolve around building up its brand image by extending its product lineup to encompass every major market segments, from high-end to mid-range to low-end. Moreover, its performance during the same period benefitted from plummeting prices and oversupply in the NAND flash market.

Market entrants in Taiwan concentrate on maintaining profitability
while those in Mainland China aggressively seek market share
The module makers listed in the 2018 ranking from fourth place and down are based either in Taiwan or Mainland China.

Taiwan’s Transcend Information and Lite-On Technology see OEMs as their target market because they want to secure stable profitability. Transcend, in particular, has been concentrating on the industrial SSD segment, which offers high-margin opportunities and steady orders from clients. Meanwhile, Lite-On has invested most of its resources into the enterprise SSD segment, where it can make full use of its competitive advantages. Since these two companies made the shift to a profit-oriented sales strategy, their shipment market shares in channel-market SSDs for 2018 also showed a noticeable decline from the previous year.

In contrast, the mainland-based SSD module makers belonging to the top 10 group (i.e. Galaxy, Telcast, Colorful, Sunspeed, and Lenovo) put most of their efforts into cultivating their home market during 2018. Besides reinforcing their advantages in the gaming market and the domestic channel market, the mainland-based module makers have also reduced their production costs by outsourcing product assembly to other ODMs. Additionally, NAND flash suppliers are fairly accommodating to the mainland-based module makers with regard to shipment quantities and prices for chips. From the perspective of NAND flash suppliers, module makers in Mainland China exhibit strong growth potential and a high degree of operational flexibility.

TrendForce points out that the aggressive module makers in Mainland China noticeably outperformed the conservative Taiwan-based counterparts in the channel market in 2018. The former were much more proactive in exploiting falling prices and abundant supply of NAND flash to expand their market shares. TrendForce also anticipates that the majority of the module makers in the upcoming top 10 ranking for 2019 will come from Mainland China. However, second- and third-tier module makers will have increasing difficulty in sustaining their operation in the future as the industry enters a period of fierce competition and consolidation.

It is worth mentioning that Longsys and BIWIN, two well-known SSD module maker in Mainland China, were excluded from the 2018 ranking.

Longsys was omitted because it remains a contract manufacturer for other domestic brands in the mainland. On the other hand, Longsys would have entered the group of the top 10 dedicated module makers if annual shipment volume was the sole criterion of the ranking.

As for BIWIN, the company only began to sell branded SSDs in the channel market in 2018 after it had acquired the license to use HP’s brand name. BIWIN thus did not ship enough branded products to allow it to enter the top 10. Nevertheless, BIWIN’s performance in the channel market is expected to improve considerably in 2019.

Lastly, this analysis indicates that the major suppliers of SSD controller chips now consider Mainland China as their main battleground because SSD module makers there are showing huge growth potential in the channel market. Specification-wise, the mainland-based module makers are increasingly demanding solutions that can support 92/96L TLC 256/512Gb and 96L QLC 1Tb flash in 2H19. It should be noted that volume production for 96L QLC 1Tb flash could begin as early as this fourth quarter.

Controller chip suppliers that want tap into the demand from Mainland China will have to extend their product lines to cover SATA DRAM-less solutions as well as PCIe G3 DRAM-less solutions for the mid-range/low-end segment. The competition among controller chip suppliers in offering mid-range/low-end PCIe G3 solutions is expected to become very intense in the 2019-2020 period.