|Lets see what Micron has to say about NAND on their call......|
Fourth quarter revenues in our Mobile Business Unit, were driven by a favorable pricing environment and significant growth in our eMCP business. Due to strong execution, sales from our mobile NAND and eMCP solutions nearly doubled year-over-year. We believe that increased DRAM and Flash capacities in flagship smartphones will continue due in part to new applications such as augmented reality in mobile devices. Our roadmap of new LPDRAM, discrete managed NAND and eMCP offerings position us well to address these market requirements.
I don't know who makes the controllers used in MU's eMCP solution. SIMO probably makes the controllers if it's a UFS solution, but I'm not sure whether eMCP means eMMC or also UFS...
During the fourth quarter, we also qualified our first 3D TLC eMCP and eMMC solutions at a major chipset vendor and now have dozens of high-density products in qualification with several OEMs. We expect production shipments to start later in 2017. Our 64-layer 3D TLC UFS products will also start OEM qualifications later in 2017, enabling us to participate in the mobile market’s highest density designs.
The Storage Business Unit recorded a revenue increase of 71% in Q4 compared with the prior year quarter, supported by strong demand for our SSD product portfolio. Late in the fourth quarter, we identified and corrected a flash component issue on select TLC 3D NAND products. We paused shipments of affected products as we worked to implement a solution to the issue, which appeared only under a narrow set of performance conditions. As a result, our SSD revenue declined sequentially during the quarter. Shipments have now restarted and we expect to resume solid sequential SSD revenue growth in Q1.
We continued to garner positive momentum with our SSD products across a broad range of customers. Our flagship SATA 5100 SSD has been qualified at enterprise server OEMs, cloud service providers and Fortune 500 companies. Demand for our client SSDs is also strong, with Micron shipping solutions to most leading PC OEMs. We see healthy demand trends for SSDs moving forward. Client SSD attach rates continue to increase. And although storage density growth has slowed temporarily due to a tight pricing environment, we foresee longer term demand for higher density SSDs.
MU is a SSD controller customer of SIMO's. This description of strong SSD sales doesn't match SIMO's Q3 guidance at all. Maybe MRVL is getting some of MU's client SSD controller business, who knows?
our 64-layer NAND production rollout is proceeding on plan and we expect to achieve mature yields in both technologies before the end of calendar 2017.
Our third-generation 3D NAND development is also proceeding well, with production expected to commence later in 2018.
We expect industry NAND bit supply growth to finish calendar 2017 in the high 30% range. At these levels, supply remains below demand, which has created a constrained environment. As the industry continues to transition to 64-layer 3D NAND, we estimate industry bit supply growth in calendar 2018 will approach the 50% range, which should better satisfy the current unfulfilled demand. We expect that Micron’s ongoing transition to 64-layer 3D NAND in fiscal 2018 will result in bit output growth that is somewhat higher than the industry range.
In fiscal Q4, 64-layer NAND represented mid-teens percent of our trade NAND bit output and we expect to achieve bit output crossover during the second half of our fiscal 2018. The dynamic industry transition to 3D NAND is taking place in the context of a NAND market that has consistently exhibited demand elasticity. We expect this behavior to continue for the foreseeable future as higher-density SSD solutions increasingly displace HDDs in client computing, cloud data centers and enterprise environments and as average capacities continue to grow with more performance-sensitive, storage-hungry devices and applications in mobile and other end markets. These trends support our view that NAND demand drivers will remain healthy into 2018.
Revenue and operating income were slightly lower quarter-over-quarter, due to the NAND component issue that Sanjay discussed earlier. With this issue behind us, we are focused on leveraging the progress we have made in penetrating the SSD markets over the past year. We estimate that our global SSD market share nearly doubled in fiscal 2017, enabling record fiscal year revenue for the Storage Business Unit.
Hmmmm, this is a bit scary. Hopefully the "NAND component issue" wasn't a defective SIMO controller.....
Sales of server and SSD solutions each were more than 3x higher than year ago levels, reflecting our focus toward a higher value-add to revenue mix.
This tells me SIMO is a not a major provider of SSD controllers to Micron. Micron had strong demand for client SSD solutions this quarter, and SIMO will have declining year on year revenues in Q3 2017. If MU's SSD products are up 3x over last year, SIMO should be growing alongside MU, but SIMO grew massively LAST year and is crapping out this year.....
in terms of NAND as it’s well-known that average capacities are increasing certainly in mobile devices, but even more importantly, SSDs are displacing HDDs at the rapid pace with the attach rates continuing to be projected to be going up over the course of next several quarters.
it’s not that this demand is perishable, I mean this demand in terms of the trend of SSDs replacing HDDs in client notebook computers where the attach rate continues to increase in 2017 attach rate of SSDs to PCs is around 35%. That attach rate over the course of next few years continues to grow to around 50% in 2018 and by 2020 timeframe expect it to go to around 75%. So, these demand trends are secular in nature.
we say that our SSD mix was about 20% of our NAND revenue and that consists of our sales of client, two client customers as well as to the hyperscale of cloud and enterprise customers. And both are roughly about the same in both of those categories. Beyond that, we don’t provide further breakdown.
specific to your second question regarding the attach rates in enterprise and server markets, so SSD attach rate is around 50% there in terms of on a SSD per unit basis and opportunity there is greater. Average capacities are definitely moving fairly fast. In fact, enterprise and data center is one of the fastest growth segments for flash in terms of year-over-year bits demand increases that are projected. Average capacities in enterprise and data center for SSDs are over 3 terabyte. That’s average capacity and that trend continues to increase by some projections tripling almost to 9 terabyte by 2020 timeframe. So as I was saying earlier, I mean, these demand trends for increasing attach rate of SSDs in client and data center cloud computing applications as well as the increases in average capacities are secular trends.
Hmmm, well there are two super interesting SIMO things in the report. The first is that some NAND component caused a major production slowdown for them in the quarter. It's resolved, which is good, but it's possible that SIMO makes the NAND component. Or maybe not. Who knows? The other interesting thing is that MU's SSD solutions tripled year on year, while SIMO revenues in Q2 and Q3 2017 are modestly down from the same quarters of 2016. So......probably MU's SSD business is not a MAJOR customer of SIMO.
The big picture remains exactly was expected. NAND production will one day ramp, SSDs will replace more and more disk drives in PCs, and as long as SIMO holds it's market share in SSD controllers SIMO's revenues should ramp along with SSD penetration. 2018 looks like it could have serious revenue growth for SIMO, unless some unexpected pops up. The long pause of 2017 will end sometime, we're still waiting, but the ramp gets closer and closer each quarter ... we hope!