South Korean’s SK Hynix is negotiating a potential 1 trillion won ($740 million USD) supply deal with Tesla to provide enterprise solid-state drives (eSSD) for AI servers, according to Hankyung (via @Tslachan).
Tesla, which invests approximately $10 billion annually in AI servers and semiconductors, looks to enhance its Full Self-Driving tech and AI systems through these upgrades.
Tesla’s shift to eSSD aligns with broader trends as tech giants like Microsoft, Google, Amazon, and Meta increasingly adopt eSSD over traditional hard disk drives (HDD) to improve speed, energy efficiency, and data handling in AI applications.
SK Hynix’s subsidiary, Solidigm, has developed industry-leading 60TB eSSD models to meet this growing demand and is also working on 122TB versions targeted for release in early 2025.
During the third quarter of 2024, SK Hynix posted record revenue of 17.57 trillion won ($13 billion USD) and an operating profit of 7.03 trillion won ($5.2 billion USD), significantly surpassing market expectations. The surge was driven by rising demand for eSSD and high-bandwidth memory (HBM), crucial components in AI servers.
eSSD’s advantages over HDD include reduced size, faster processing speeds, and lower power consumption, helping companies like Tesla cut power costs by 80% over five years. With the global eSSD market expanding rapidly — from $3.75 billion in Q1 to $6.89 billion in Q3 this year — the market is projected to hit $30 billion by 2027.