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Why SanDisk is expanding its presence through joint ventures

Anupama Shukla

An in-depth review of SanDisk's 2Q14 earnings and plans (Part 7 of 12)

(Continued from Part 6)

SanDisk joined hands with Toshiba to produce 3-D NAND Chips

SanDisk is aggressively pursuing its strategy to expand its enterprise storage portfolio. It has joined hands with industry leaders to form a symbiotic relationship.

In May 2014, SanDisk announced its deal with Toshiba. The deal involved the production of 3-D NAND Chips. 3-D chips are considered revolutionary, as they can store up to 16 times more data than planar or 2-D chips. Their joint facility in Japan will be producing 3-D NAND chips from 2016. Samsung has a first mover advantage in this market.

The chart above shows the leading players’ market share in the SSD market. Samsung, a leading supplier of NAND flash memory, leads the market with a 29% market share. It’s followed by Intel (INTC) with a 13% market share. SanDisk held 11.7% of the market in 2013 compared to its 5% market share in 2012. So it registered an increase of 134%. Micron Technologies (MU) commands a 7% market share.

Western Digital’s partnership with SanDisk

Western Digital (WDC) has partnered with SanDisk to create Hybrid SSDs, a hybrid storage option that consumes 50% less power than normal HDDs and employs SanDisk iSSD, built on a 19-nanometer processor technology, to achieve the benefits of both products. As enterprises transition from HDDs to SSDs, SanDisk is likely to benefit from the transition.

Partnership with IBM, Super Micro Computers, and Diablo Technologies

With the collaboration of Super Micro Computers and Diablo Technologies, SanDisk launched ULLtraDIMM SSDs in 2014. ULLtraDIMM is a flash storage technology that connects directly to the memory bus through the DIMM form factor, just like DRAM memory. It’s designed to work on idle DRAM slots that connect the NAND module directly to the central processing unit or CPU and don’t require any driver support.

ULLtraDIMM drives have a write-latency of 5µ seconds. That’s the lowest across the industry, versus around 50 microseconds for PCIe SSDs. It’s approximately 800 times faster than conventional HDDs, and approximately ten times faster than established and enterprise-preferred PCIe-based SSDs. Because of these features, they’re useful in CPU- and disk-intensive tasks like high-frequency trading and online transaction processing in the financial industry.

RBC expects DIMM-dedicated SSDs like ULLtraDIMM drives to have a penetration rate of approximately 10% by 2015. So ULLtraDIMM drives are the fastest enterprise-scale SSDs. They’re expected to strengthen SanDisk’s position in the enterprise SSD space.

At present, ULLtraDIMM drives haven’t garnered enough popularity. If they’re successful and garner enough attention in the near future, Intel and Micro Technologies might enter into this space.

IBM Corp. (IBM), a leading high-performance server manufacturers and a customer of SanDisk, is expected to use ULLtraDIMM drives on its X86 servers.

Association with China-based mobile device manufacturers

SanDisk has partnered with China-based mobile device manufacturers to benefit from the strong growth expected in the mobile market. The company launched iNAND Standard, which is a X3-based embedded offering, and expanded its mobile offerings for mid- and entry-level smartphones and tablets.

Continue to Part 8

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