Is Tesla in talks with SK Hynix for $725 million eSSD order?

Tesla is in talks with South Korean chipmaker SK Hynix for a possible USD 725 million order of enterprise solid-state drives (eSSDs), a key component of AI chips, according to a report by the Korea Economic Daily . According to SK Hynix’s subsidiary Solidigm, eSSDs can save significant electricity costs. With demand for AI chips exploding, the demand for eSSDs, which can process large amounts of data at a fast pace, is also shooting up as they become a core part of AI chips together with HBM chips.

Solidigm already supplies 60 terabytes(TB) eSSDs to big tech firms. Tesla has pledged to invest USD 10 billion every year in building its AI supercomputer, Dojo, for which the US electric carmaker needs fast and large capacity drives to improve the system’s efficiency. Tech giants like Microsoft, Amazon and Meta are also actively ramping up their use of eSSDs.



Global eSSD sales nearly doubled to USD 6.9 billion in the third quarter ending in September from USD 3.8 billion in the first quarter, according to tech market intelligence firm TrendForce .

The global eSSD market is expected to grow to about USD 20 billion by 2027, TrendForce predicts. SK Hynix rival Samsung Electronics is expected to unveil the industry’s highest-capacity 128TB eSSD next month. Last week SK Hynix posted record quarterly profit on the back of strong demand for its HBM chips used in generative AI.

The world’s second-biggest memory chipmaker reported an operating profit of 7 trillion won (USD 5 billion) for the July-September quarter from a loss for the same period last year. HBM sales were up more than 70% from the previous quarter and total revenue for the quarter rose 94% year-on-year to 17.6 trillion won.

.