We live in a world that runs on memory and storage, and even one day without it could turn into a nightmare. Ankita K.S. from the EFY Group spoke to Arun Kumar, sales director, India, Kingston Solutions and Anand Jayapalan, VP, Kingston Digital, to know more about the global memory trends, the embedded market and Kingston’s business strategy in India. Excerpts follow…
EB: How lucrative is the Indian market currently?
India is going through urbanisation of the rural areas. For example, getting access to Wi-Fi or connectivity, something 80 per cent of the country doesn’t currently have, requires a lot of processing at the edge. A lot of this is going to happen in the next three to five years. You will see the connectivity between cell phones, smart speakers, set-top boxes, points of sale and everything else grow tremendously.
EB: In terms of global technology trends, where does India lag behind and what more needs to be done to bridge the gap?
There are two ways to look at this. The first is the technology that is required for a market like India and how it aligns with the global trends. The second is that you must align with the resources and capabilities that India has currently, within the embedded ecosystem. These are two completely different but related topics.
Let me talk about the first one. For example, the Flash industry in India is growing rapidly. These numbers may scare you, but the global supply of NAND Flash in CY2019 is projected to be approximately 300 billion gigabytes. Analysts expect the Flash bit growth over the upcoming years to be approximately 30 per cent, year over year. This requires significant investments made by NAND Flash producers, especially to transition to next-gen NAND technology nodes, which drive bit growth as well as cost reduction compared to previous generation technology. As a result, the NAND Flash producers want to see a quick return on these large investments.
So, with each new generation of NAND technology, the minimum chip densities are getting larger, which supports the overall theme within the advanced global economies. In other words, the minimum storage capacity in a smartphone within mature economies is 64GB and higher, mostly 128GB and 256GB. This is being driven by the exploding content, video-on-demand consumption, 4K media, etc.
Yesterday’s lowest storage capacities are no longer even available today. And yesterday’s highest capacity is today’s lowest. However, in India where approximately 160 million units smartphone shipments are being projected for CY19, we still have approximately 500 million feature phone users today, a figure that is projected to grow to over 800 million in the next three years.
EB: How is Kingston leveraging this opportunity?
The scenario I just described offers a great platform for Kingston to help address the entry/mid-tier smartphone segment where the storage capacity requirements are significantly lower than the rest of the world, while the volumes are significant.
Given the misalignment between the general technology roadmap and the requirements of the emerging markets in India, we don’t see a lot of vendors who cater to this segment today. This is where Kingston, with a ‘channel first’ focused strategy, believes it has a value proposition that can help address the needs of the growing Indian market.
EB: Could you briefly tell us about the market challenges in India with respect to NAND?
The growth of NAND Flash within devices (smartphones, set-top boxes, point of sale, smart watches, smart meters, etc) that enable India’s digitisation plans, provides a significant opportunity. At the same time, this massive opportunity also poses a major challenge for memory/storage solutions vendors, given the unique requirements that are specific to India.
For instance, the average capacity that’s required for entry-level smartphones, set-top boxes and wearables is approximately 8 gigabytes (GB). This 8GB capacity point is almost obsolete in most other parts of the world, besides the fact that it is produced using technology that is three to five years old. The NAND Flash manufacturers seldom carry these older technologies and even if they do, they only support a limited volume to supply within their fabs.
EB: What is the biggest challenge for vendors who are still supporting the older technology?
The biggest challenge most vendors face is to support these technologies in volumes and, most importantly, in a cost-competitive manner that meets the Indian market’s needs. This is a major challenge and calls for a very focused strategy to address this market’s requirements. Given our presence in the embedded market in China and other emerging economies that went through a similar transition, Kingston is well positioned to address the needs of the embedded market in India.
EB: What are the challenges when it comes to DRAM?
The DRAM world is even more complex, because in the Flash domain you have seven to eight semiconductor vendors who manufacture Flash memory. But in the case of DRAM, there are only three players, which makes it even more challenging. Hence, personally, I see the challenge as how to address this important and high-volume market, with technologies that are a generation or two old, in a cost-competitive manner. I also expect that some manufacturers will adapt and start to carry the legacy technologies longer than they currently do, thereby addressing the needs of growing markets such as India.
EB: Any innovation strategy to stay ahead of your competitors?
At Kingston, we don’t own fabs but partner with our vendors, who are large semiconductor manufacturers. For example, we buy NAND Flash and DRAM wafers from our partners like Toshiba, Intel or Micron and we build and test Kingston branded products using those technologies, in-house. We are always looking for the best technologies that address the needs of specific applications/end market segments.
So in a lot of ways we are constantly looking to push the envelope to see what the market requires for specific products and applications along with the differentiation that’s required in the firmware for a specific application.
EB: What is Kingston’s offering to the Indian market?
Currently, Kingston has a strong portfolio of products that cater to a broad range of end markets (spanning PCs, servers, gaming, mobile, connected homes, IoT, etc), backed by a strong manufacturing base, a global supply chain, and local logistics. Besides having a strong retail presence for cards and USBs, we are also a global leader in solid-state drives (SSDs) for the PC, enterprise and cloud data centre markets.
Kingston also provides supply chain and logistics support to several Tier-1 OEM customers in addition to doing contract manufacturing of SSDs. With a large channel and customer base that Kingston has built globally over the past 30 years, KSI (Kingston Solutions India), which is the embedded business unit of Kingston Technology Corp, is focused on bringing its strong embedded portfolio to cater to the growing Indian market. This is particularly for the mobile phone, wearables, set-top box, point of sale and other emerging market segments.
EB: How do you plan to strengthen your foothold in India?
Phase 1 of our plan is to establish a local presence for sales and support, learn and understand the customer/end market needs, and assess the Make in India policies so our strategy can be aligned with what the Indian government is looking for.
We want to do things right in an organised, systematic and scalable manner. So, we started out with establishing a local sales presence, and this was followed by signing Arrow as our distributor in India.
EB: What is your business plan in India, say for the year 2021?
Currently, with initiatives like Make in India, we believe it is the right time for Kingston to leverage what we’ve learnt in other markets like China and participate in India’s explosive growth. Having said that, there will be nuances unique to the Indian market, especially in terms of product attributes, pricing, supply chain, etc, that we need to learn and adapt to.
Our primary objective was to come down and educate the India ecosystem including customers, ODMs, IDHs, partners and distributors about who we are, what we do, and share our plans, both near-term and the long-term.
In the next year or two, we hope to have a good footprint of our memory and storage solutions, serving all Indian markets, thereby participating in the urbanisation of rural India.
