As 2025 unfolds, the global memory industry faces significant challenges and uncertainties. Wallace Kou, President and CEO of Silicon Motion, shared insights in an exclusive interview with China Flash Market. He discussed how the company, as a global leader in NAND flash controllers, leverages differentiated strategies and technological innovation to maximize value for its customers amidst a complex market environment.

According to Mr. Kou, the consumer electronics market underperformed in Q4 2024, with inventory pressures leading customers to adopt conservative purchasing strategies. Looking ahead, he anticipates a slight decline in NAND flash prices during the first half of 2025 due to seasonal weakness, though the decline will be limited. The second half of the year is expected to see a recovery as supply-demand dynamics stabilize. This recovery will be driven by factors such as the end of support for Microsoft Windows 10 prompting PC replacement demand, the growing adoption of AI PCs, and the launch of new smartphone models.

Mr. Kou emphasized that structural shifts in the market present new opportunities. Silicon Motion will continue focusing on high-value products and applications, helping customers adapt to these changes with greater flexibility.

Driving Market Leadership: 6nm Controllers for High-End Applications

Amid intensifying global competition, Silicon Motion made significant advancements in 2024 by introducing multiple flash controllers based on TSMC's 6nm process. These include the UFS 4.1 controller taped out in Q1 and the 8-channel and 4-channel PCIe Gen5 SSD controllers taped out in Q2 and Q3, respectively. These high-performance products deliver high storage efficiency and reduced power consumption, establishing a strong competitive edge in the market.

Despite the high cost of $20 million per tape-out for each 6nm controller, Mr. Kou believes these investments will yield higher average selling prices (ASPs) and attract more OEM orders. This strategy not only supports revenue growth but also strengthens Silicon Motion's position in high-end markets.

Pioneering QLC NAND Solutions and Expanding Across Applications

As a leader in QLC NAND technology, Silicon Motion has demonstrated its technical expertise and comprehensive market presence across various applications:

Smartphones:

QLC NAND offers significant advantages in capacity and cost efficiency for smartphones. Mr. Kou revealed that several smartphone brands—three to four at present—are either planning or already producing solutions featuring QLC NAND. While QLC may fall short of TLC in terms of speed, endurance, and management, Silicon Motion's advanced controllers and cutting-edge error correction technology ensure a user experience comparable to TLC. Additionally, Silicon Motion has taped out a 6nm UFS 4.1 controller targeting the high-end market. Mr. Kou believes that while UFS 2.2 and UFS 3.1 currently dominate the market, Silicon Motion will be a key beneficiary of the shift to UFS 4.1 over the next two-three years as handset makers look to add greater capabilities for consumers.

PCs:

Mr. Kou is optimistic about modest growth in the PC market in 2025, driven by next-generation processors from Intel and AMD. Silicon Motion's SM2508 PCIe Gen5 SSD controller, featuring advanced 6nm processing and an 8-channel design, has already secured orders from major PC OEMs. Compared to competing solutions built on 12nm or 7nm processes, the SM2508 achieves 30% lower power consumption, making it ideal for laptops, AI PCs, gaming devices, and workstations. Mr. Kou predicts the SM2508 will enable Silicon Motion to capture over 50% of the global high-end PC market, a previously untapped segment that promises significant financial contributions.

Data Centers:

Mr. Kou noted that PCIe Gen5 enterprise SSDs exhibit distinct regional preferences, with TLC NAND favored in China and QLC NAND gaining traction in North America. Silicon Motion's MonTitan PCIe Gen5 enterprise SSD development platform, built on extensive experience in both TLC and QLC technologies, has secured orders from two Tier 1 customers, with more expected in the coming years. Mr. Kou anticipates wider adoption of QLC NAND within 1-2 years, with MonTitan contributing 5-10% of revenue by 2026.

Automotive:

The automotive industry's increasing reliance on advanced driver-assistance systems (ADAS), autonomous driving, and smart cockpits is driving demand for higher-performance and larger-capacity storage solutions. Silicon Motion has developed several automotive PCIe Gen4 SSD controllers and achieved ASPICE CL2 certification, with plans to attain CL3 certification this year. Additionally, the dual-port PCIe Gen5 automotive SSD controller is slated for release in the second half of 2025.

As 2025 unfolds, Mr. Kou remains confident in Silicon Motion's future. The company's deep expertise in QLC controllers, combined with its cutting-edge offerings such as the 6nm UFS 4.1 controllers, PCIe Gen5 enterprise and client SSD controllers, and the upcoming 4nm PCIe Gen6 SSD controllers, positions it to achieve significant market share gains in high-end applications for smartphones, PCs, and data centers.

Looking forward, Silicon Motion will continue to build on its differentiated strategies and technological innovation to help customers unlock greater value while maintaining its leadership in the storage industry.