1) Good time to talk about NAND and the data center. Digitimes reported that SK Hynix announced on August 25 that it has completed development of its 321-layer 2TB QLC NAND flash and has begun mass production, with global customer certification finalized and commercial launch planned for 1H26 (management said "by the end of this year" in Q2).

2) Looking closely at $MU and SK Hynix's CY Q2 earnings, both firms are doing quite well in NAND, but were TOTALLY overlooked. Here is a recent example: $MU CEO Sanjay Mehrotra in Q3 FY25: "In NAND, we achieved a new quarterly record for market share across data center SSDs as well as client SSDs in calendar Q1. For the first time ever, during calendar Q1, Micron has become the #2 brand by share in data center SSDs according to third-party data." "In NAND, we reached a record-high mix of QLC bits in the quarter. We started qualifications for new high-performance SSD products based on our G9 2-terabit QLC NAND, and we continue to ramp our G9 node at a pace consistent with demand."

3) The same is seen on SK Hynix as well, and more signals on importance of NAND (eSSD) and Data Center. Here are two comments from management from SK Hynix: "As HBM director mentioned at the beginning of Q&A session, this is because AI units and the results in volume of token generation is expected to grow at an astronomical pace far beyond what we can imagine today. And traditional data processing methods will not be able to handle this exclusive surge in demand. That's why there is a growing attempt to offload AI inference data caching to eSSD. And as that, we expect initial demand to materialize within the next 2 to 3 years. If this trend becomes a reality, eSSD will no longer remain as a mirror storage device or whether it will evolve into part of the compute cash and their roles and positions within the AI system will be changed. And we expect this will mark the beginning of significant demand growth in the NAND market."

4) Q2 NAND performance was great for Hynix despite the pull-in effect and low-based quarter: SK Hynix: "Coming from a low base of the previous quarter, NAND shipments significantly exceeded guidance by increasing over 70% sequentially as demand rose across all applications. ASP declined by high single-digit percent Q-o-Q due to continued pricing weakness in solution products despite price rise in the spot market."

5) Taken together, an emerging trend points to the growing importance of eSSD (NAND) in data centers, driven by the rapid acceleration of AI inference and the critical role of eSSD in both processing and storing data. If this trajectory holds, eSSD adoption and growth should continue to accelerate as long as demand for faster, cost-efficient AI inference infrastructure remains strong. To that end, there could be an upside for leading memory maker in coming years, at minimum a trend to pay close attention to. /end

6) Idea enlightened by @QF Research (the best account I have followed since on this platform, follow him if you havene't). https://x.com/ResearchQf/status/1959666483744628770…