I. Market News

a) Driven by advancements in AI, TrendForce predicts that SSD shipments will soar, maintaining a growth rate of over 60%.

The latest TrendForce report reveals that the rising demand for AI has prompted AI server customers to substantially increase their orders for enterprise-level SSDs over the past two quarters. To address these needs, upstream suppliers are ramping up efforts to upgrade their products. They plan to mass produce SSDs with more than 200 NAND layers or even 300 layers in 2025 and finally launch enterprise-level SSDs with over 120 TB capacity.

TrendForce estimates that AI-related SSD capacity procurement will exceed 45 EB this year. In the upcoming years, AI servers are expected to drive the annual growth rate of SSD demand beyond 60%.

b) Western Digital launched 128 TB QLC enterprise-level SSD.

At the Future of Memory and Storage (FMS) 2024 on August 7, Western Digital unveiled its 128 TB ultra-large-capacity enterprise-level SSD, which will be officially available in 2025. The company also revealed plans to launch a 256 TB SSD by 2027, followed by a 1 PB SSD in the future.

Western Digital stated, "The new 128 TB SSD uses the 8th-generation BiCS8 NAND, a QLC media jointly developed by Western Digital and Toshiba. This SSD delivers the performance and capacity needed by AI, machine learning, and large language models."

c) Solidigm showcased a 122 TB enterprise-level QLC SSD, set to be available in 2025.

On July 22, 2023, Solidigm released a 61.44 TB enterprise-level SSD, setting a new record for the largest capacity of enterprise-level SSDs. At the beginning of August 2024, Solidigm showcased its 122 TB SSD. This Gen4 QLC SSD delivers an IOPS of 129,000 under 4 KB random reads and sequential read and write speeds of 7 GB/s and 3 GB/s, respectively.

Large-capacity QLC SSDs are mostly used in AI applications and have gained great popularity in the market. Samsung and Western Digital have launched or showcased SSDs with capacities exceeding 60 TB, and they have announced plans to release SSDs surpassing 120 TB in the future.

d) Micron unveiled the industry's first PCIe 6.0 SSD to strengthen its leadership in storage technology.

During the FMS 2024 on August 5, Micron unveiled the industry's first PCIe 6.0 data center SSD, delivering over 26 GB/s sequential read bandwidth. This SSD is designed to meet the diverse demands of the AI market and further strengthen Micron's leadership in storage technology.

On August 7, Raj Narasimhan, Senior Vice President and General Manager of Micron Compute & Networking Business Unit, delivered a keynote speech titled "Data is at the Heart of AI: Micron Memory & Storage are Fueling AI Revolution", exploring how Micron's industry-leading products are revolutionizing AI system architectures, enabling faster and more power efficient management of vast data volumes.

Raj Narasimhan stated, "Data is at the heart of AI. Micron's storage solutions are driving AI innovations. Our PCIe 6.0 SSDs not only reach new highs in speed and energy efficiency, but also provide strong support for partners to build more powerful and efficient AI systems."

e) Huawei DCS is named a leading VMware vSphere alternative by DCIG.

On August 1, the Data Center Intelligence Group (DCIG), a world-renowned technology analyst firm, released its 2024-2025 DCIG TOP 5 Enterprise VMware vSphere Alternatives Global Edition Report. Huawei DCS full-stack data center solution topped the list for its leading advantages in terms of elasticity, high performance, high availability, and full-stack management.

The report offers a detailed analysis of 24 solutions from different vendors worldwide. It helps enterprises identify the optimal data center virtualization solution and provides comprehensive procurement suggestions.

II. Industry Trends

a) The FMS 2024 saw the debut of the latest NVMe version, optical-port disks, and a CXL memory sharing solution.

On August 6, the FMS 2024 was held in the US.

This year's FMS has three highlights:

(1) On August 7, 2024, the NVMe Express organization announced new specifications, including the NVMe Boot specification, Subsystem Local Memory command set, Computational Programs command set, NVMe 2.1 Base specification, Command Set specifications (NVM Command Set, ZNS Command Set, and Key Value Command Set), Transport specifications (PCIe Transport, FC Transport, RDMA Transport, and TCP Transport), and NVMe Management Interface specification.

(2) Kioxia showcased its optical-port SSD, which is a compelling new technology expected to transform the storage architecture in data centers and high-performance computing environments.

(3) CXL remains a trending topic, with XConn Technologies and MemVerge presenting the industry's first scalable CXL memory sharing solution. This solution enables XConn's high-performance CXL interconnect switch to work with MemVerge's intelligent tiering software to improve performance and reduce the total cost of ownership (TCO) of AI applications and in-memory databases.

b) QAX Security Insights: Ransomware attacks have become more targeted and frequent in the first half of 2024, while customers' security awareness has significantly increased.

On August 16, QAX published its Security Insights report, revealing that ransomware attackers extorted over US$459 million (approximately CNY3.293 billion) from victims in the first half of 2024. This highlights the escalating ransomware crisis, which is impacting organizations of all sizes, from large enterprises to local governments and hospitals. Ransomware variants are increasingly targeting larger enterprises and critical infrastructure providers, as these organizations are well-funded, hold valuable data, and are more likely to pay huge ransoms.

Researchers indicate that ransomware attacks are more frequent than last year. The number of attacks recorded this year has increased by at least 10%. However, the number of ransomware payment events decreased by 27%, indicating that more victims may be better prepared to recover data.

c) ModelEngine, the industry's first full-process AI training and inference tool chain using the streaming programming framework, made its debut at GOTC 2024.

On August 15, the Global Open-Source Technology Conference (GOTC) 2024 was jointly held by Open Source China and Shanghai Pudong Software Park in Shanghai. Zhang Qunhui, chief expert of Huawei data storage software, was invited to share the application of ModelEngine in industry-specific models.

ModelEngine is a full-process tool chain for AI training and inference in Huawei DCS solution. It provides powerful capabilities including data processing, knowledge generation, model fine-tuning and deployment, and RAG application development and deployment. It offers an efficient, easy-to-use, open, flexible, and out-of-the-box AI development environment for data processing engineers, model engineers, and application developers.

In the future, ModelEngine will continue to improve and innovate, enhance scalability and customization capabilities, optimize performance and efficiency, and provide more application examples to meet developers' diversified requirements in different scenarios and explore the infinite possibilities of AI.

d) Cantian and the MariaDB Foundation witnessed the unveiling of Cantian's first partner release.

On August 3, the China MySQL User Group Meeting was held in Beijing. Technical experts from the MariaDB Foundation, Huawei, Klustron, and other organizations discussed the latest database technologies and architecture, and shared their experience and expectations regarding the development of the open source community.

Monty, founder of the MariaDB Foundation, believes that the in-depth combination of databases and high-end storage technologies is expected to open up new space for MariaDB database solutions. In the future, the integration of MariaDB with the Cantian storage engine will bring more unique value to users, deliver higher performance and reliability for databases, and significantly reduce the overall database usage cost.

III. Industry Policies

a) The Big Data Expo released China's first Data Industry Landscape, highlighting the rapid expansion and huge potential of China's data industry.

On August 27, the China International Big Data Industry Expo (Big Data Expo) released China's first Data Industry Landscape. The Landscape presents, for the first time, the fundamental meaning, composition, subjects, and characteristics of China's data industry, illustrating its current development status and immense potential.

The data industry is a new industry form during data element development. It consists of five elements: data resources, data technologies, data products, data enterprises, and data ecosystem. There are six types of entities: data resource enterprises, data technology enterprises, data service enterprises, data application enterprises, data security enterprises, and data infrastructure enterprises. These entities correspond to data collection and aggregation, computing and storage, circulation and transaction, development and utilization, security governance, and data infrastructure construction and operations, respectively.

The data industry is expanding rapidly. In 2023, there were 193,172 data enterprises in China. The scale of China's data industry was CNY1 trillion in 2020 and surged to CNY2 trillion by 2023. It is estimated that the average annual growth rate will remain above 20% from 2024 to 2030, with the data industry scale expected to reach CNY7.5 trillion by 2030.

b) The National Data Administration propels the data industry forward through technological innovation, resource allocation, and application effectiveness.

On August 28, the China International Big Data Industry Expo (Big Data Expo) was opened in Guiyang, Guizhou Province. At the opening ceremony, Liu Liehong, Director of the National Data Administration, highlighted the data industry as an emerging sector. From the perspective of technological innovation, trusted data circulation is evolving rapidly. In terms of resource allocation, data plays a vital role in fostering the innovative distribution of other production factors. Regarding application effectiveness, data and services are more closely integrated, enabling in-depth transformations and upgrades across industries. Developing the data industry is a key strategy for advancing the market-oriented allocation of data elements and is an inevitable choice for fostering new productivity and driving high-quality development.

Liu Liehong stated, "Based on comprehensive research conducted in the initial phase, the National Data Administration is collaborating with relevant departments to formulate industry development policies. The purpose is to seize the strategic opportunities presented by the data industry's expansion, nurture data enterprises, shape the industry ecosystem, and finally transform China's market scale and mass data volume into the competitiveness of our data industry."

c) Hubei released the Action Plan for High-Quality Development of Computing-Network Synergy (2024-2026) to promote the growth of storage capacity and advanced storage power.

On July 19, Hubei Provincial Communications Administration, together with the Provincial Cyberspace Administration, Provincial Department of Education, Provincial Department of Economy and Information Technology, Provincial Department of Public Security, Provincial Department of Transport, Provincial Department of Agriculture and Rural Affairs, Provincial Health Commission, Provincial Bureau of Statistics, and the Hubei Branch of the People's Bank of China, issued the Action Plan for High-Quality Development of Computing-Network Synergy in Hubei (2024-2026).

According to the Action Plan, three regional computing power hubs will be established in Wuhan, Yichang, and Xiangyang by 2026, aiming to create the central node of the national computing power network. The computing power supply will be properly balanced, with the data centers scaling up to 400,000 standard racks. The total computing power will reach 20 EFLOPS, including 15 EFLOPS in high-performance computing, which will constitute 75% of the total. High-quality and efficient interconnection of computing networks will be established, achieving one-way latency of less than 1 ms within a city and less than 3 ms across the three computing power hubs. Additionally, advanced storage power infrastructure will be developed to ensure efficient and flexible storage capabilities. By 2026, total storage power is projected to reach 80 EB, with advanced storage accounting for 35%.

By strengthening the construction of computing infrastructure in Hubei, the Action Plan will accelerate the high-quality development of computing networks and integrate them into the national computing system. This will position Hubei as a leader in new development and an essential strategic pillar for the rise of the central region.

d) China's top 3 operators included "data resources" into their semi-annual reports.

On August 20, China Telecom officially released its 2024 semi-annual report, marking the disclosure of the semi-annual reports from China's all top 3 operators. Compared with previous financial reports, the three major operators included "data resources" into their latest financial reports.

In the consolidated balance sheet, China Mobile has classified data resources under intangible assets and development expenditures. Statistics show that, as of June 30, China Mobile's intangible assets totaled CNY46.622 billion, of which CNY29 million was for data resources. The development expenditure reached CNY2.319 billion, of which CNY41 million was for data resources. In addition, China Mobile's R&D expenditure included about CNY121 million related to data resources.

China Telecom and China Unicom included data resources in development expenditure. According to the financial report of China Telecom, as of June 30, China Telecom's development expenditure reached CNY2.877 billion, of which CNY105 million was for data resources. According to the financial report of China Unicom, as of June 30, China Unicom's development expenditure reached CNY3.789 billion, of which CNY84.7639 million was for data resources.

e) CAICT is seeking submissions of typical cases related to the construction of advanced storage power centers for 2024.

On July 19, China Academy of Information and Communications Technology (CAICT) under the Ministry of Industry and Information Technology (MIIT) launched an initiative to collect typical cases of building integrated storage and compute data centers and advanced storage power centers in 2024. This initiative aims to enhance guidance for innovative data center construction, invigorate data-compute collaboration, and foster the growth of the data infrastructure industry.

With the in-depth implementation of the "Digital China" strategy, the accelerated market-oriented allocation of data elements, and the rapid development of technologies such as 5G, AI, IoT, and big data, the data volume increases explosively. New models, such as integrated storage and compute data centers and advanced storage power centers, have emerged in multiple regions across China.

As a core component of computing power infrastructure and new data infrastructure, the advanced storage power center is dedicated to providing all-scenario data service support for various industries. It facilitates data retention, protection, value extraction, and the continuous evolution of data and algorithms, thereby enhancing the efficiency and quality of data services and unleashing data value. This, in turn, provides robust support for the digital transformation of diverse industries and promotes high-quality economic and social development.

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