Samsung Electronics is accelerating its push into the enterprise solid-state drive (SSD) market, which is emerging as a new goldmine in the memory semiconductor sector, thanks to generative artificial intelligence (AI). This is because it is difficult for the traditional cash cow markets of dynamic random-access memory (DRAM) and NAND flash to rebound in the short term.
Samsung Electronics plans to offer its AI-specialized enterprise SSD business, named "Taitan," as a subscription service to secure an edge over competitors such as SK hynix, Solidigm, and Micron.
According to industry sources on the 14th, Samsung Electronics has begun supplying ultra-high-capacity server SSD products equipped with an AI-specialized controller based on its own technology under the name Samsung Taitan to major server companies in the United States and Europe. Taitan is designed to enhance the AI processing performance of data centers by tailoring the controller, which can be regarded as the brain of the SSD, to generative AI.
A feature of the Taitan project is that Samsung Electronics will contract with numerous IT corporations, including major U.S. tech companies, to provide enterprise SSDs as a type of subscription service. In the medium to long term, Samsung Electronics aims to support the overall storage service operation and updates of IT service companies. Amid intensifying competition in the enterprise SSD market, Samsung Electronics expects a lock-in effect with its customers.
The most significant bottleneck in the memory connection configuration, which runs from the central processing unit (CPU) and graphics processing unit (GPU) through main memory (DRAM, high bandwidth memory (HBM)) to storage (SSD, HDD), is storage. As data moves from the processor to storage, the data processing speed decreases. In response, Samsung Electronics plans to enhance the AI controller functionality in its SSDs to provide cost-effective options for AI developers and PC users.
A source familiar with Samsung Electronics noted, "In the case of Taitan, because we establish long-term contracts with customers as a subscription service, we can respond immediately to rapidly changing AI technologies and provide maintenance through continuous partnerships." The source explained, "Last year, we introduced the petabyte (PB) grade SSD solution and subscription service in the U.S., and this year we will fully expand Taitan into the global market."
The enterprise SSD business is highly likely to act as a significant variable in Samsung Electronics' performance this year. While SK hynix is expected to achieve solid results based on its strength in the high bandwidth memory (HBM) market despite weak demand for DRAM and NAND flash, Samsung Electronics' HBM business has not yet reached its full potential, and its general-purpose DRAM and NAND businesses are also experiencing declining profitability.
According to market research firm Global Information, the global SSD market size is projected to grow from $65.47 billion in 2024 to $147.01 billion in 2029. The compound annual growth rate (CAGR) is expected to reach 17.56%.
Samsung Electronics is facing challenges from SK hynix in the enterprise SSD market, where it once boasted overwhelming market share. According to market research firm TrendForce, Samsung Electronics achieved a 39.5% market share (by revenue) in the enterprise SSD market in the fourth quarter of last year, ranking first. SK hynix, including Solidigm, trails with a market share of 31.3%.