Guotai Haitong: The global SSD controller market is growing rapidly, focusing on two investment themes.

Guotai Haitong released a research report stating that the global SSD controller market is experiencing rapid growth due to the accelerating penetration of SSD in various fields. Emerging demands such as AI and data centers are driving the upgrade of high-end SSD controllers, while the rise of automotive electronics and industrial Internet of Things is creating new growth points for automotive-grade storage controllers. The investment focus primarily revolves around two aspects: firstly, high-performance PCIe 5.0 and other high-end controllers suppliers benefiting from the expansion of AI training and cloud infrastructure; secondly, storage controller manufacturers in the mobile and PC sectors with low power consumption and cost advantages. In addition, the penetration rate of automotive and industrial storage controllers is expected to increase in the long term, making it worth paying attention to related participants. Guotai Haitong's main viewpoints are as follows: Storage controllers are crucial chips that connect host processors and storage media (NAND Flash/DRAM). Their importance lies in determining the performance and reliability of storage systems, making them an indispensable part of the storage industry chain. While magnetic storage (HDD) also requires storage controllers, they operate on different principles and functionalities compared to semiconductor storage controllers. The following discussion mainly focuses on semiconductor storage SSD controllers. Benefiting from the rapid penetration of SSD in various fields, the global SSD controller market is experiencing rapid growth. According to Consegic commercial statistics, the global SSD controller market is expected to reach approximately $24.965 billion in 2024, increasing to $27.763 billion in 2025, with a compound annual growth rate of approximately 14.4% from 2025 to 2032, exceeding $66.1 billion by 2032. Other data from various organizations may vary slightly, but all expect double-digit growth rates, reflecting the combined demand for controllers driven by the increasing shipments and prices of SSD in the coming years. The global competitive landscape of the storage controller industry features a coexistence of independent manufacturers and IDM manufacturers. Independent manufacturers have advantages in customer diversity and technical services, occupying a considerable market share, with many well-established digital chip design manufacturers from the United States and Taiwan in the mix. IDM manufacturers excel in product integration and optimization, developing controllers for their own SSD products for vertical integration purposes and not selling them externally, but their shipment volumes hold a significant position in the overall market. Both models coexist in the long term. Furthermore, the storage controller industry has high technological and ecological barriers, making it challenging for new entrants to enter. The current core logic of the industry lies in the fact that emerging demands such as AI and data centers are driving the upgrade and replacement of high-end SSD controllers, while the emergence of automotive electronics and industrial IoT brings new growth opportunities for automotive-grade storage controllers. The investment focus is primarily divided into two aspects: firstly, high-end controller suppliers benefiting from AI training and the expansion of cloud infrastructure, such as high-performance PCIe 5.0; secondly, storage controller manufacturers in the mobile and PC sectors with low power consumption and cost advantages. Additionally, the penetration rate of automotive and industrial storage controllers is expected to increase in the long term, making relevant participants worth noting. Risk factors: While the investment opportunities in the semiconductor storage controller industry are significant, there are also certain risks in the industry, mainly concentrated in upstream cyclical fluctuation risks, vertical integration substitution risks, and price competition leading to compressed gross profit margins.