Leading Chinese storage device maker Longsys taps into IoT market with custom-made solutions

China’s leading memory module maker Shenzhen Longsys Electronics Co. uses its experiences and advantage in the memory industry as well as its keen sense of the market potential to take on the market transformation, as the technology industry moves from the PC era, in which a handful of firms dominated the market, toward integration of industries.

Longsys’ ambition did not go unnoticed during Computex 2016. Kevin Wang, Longsys’ vice president of sales, led his team during the tradeshow and deepened cooperation with existing clients, as well as opened up business opportunities with customized solutions, in order to expand the company’s presence into the promising Internet of Things (IoT) and VR/AR.

Established in 1998 with headquarters in Shenzhen, southeastern China, and a focus on memory products, Longsys is a relatively young company, compared to other memory device manufacturers. To meet the demands brought by the rise of new technology, R&D personnel accounts for 50 percent of its staff. In addition to a focus on employees’ strengths, its company culture also emphasizes innovation and exercises an employee stock ownership program to encourage work performance.

How exactly did this young company surge past its more experienced rivals to become China’s largest memory device maker?

"We looked at where the large corporates failed to satisfy their clients, such as when low profits and inconvenience caused those big companies to be disinterested, we then approached the clients with customized solutions,” said Wang.

Meanwhile, Longsys also seeks to build partnerships with industry leaders. In 2015, Longsys and controller giant Marvell reached a strategic cooperation to make SSDs.

In the past 17 years, with the help of customized services, Longsys gradually became the leader in the memory industry, making over 200 million units of memory devices every year.

Storage trend: SSDs to become more common

In the era of Big Data, storage demands at individual and corporate levels, as well as in servers, are also rapidly increasing. The market demand for SSDs is flourishing at a 20 percent annual growth rate. The improved technology in SSDs in recent years helped SSDs make way into 30 percent of the laptop computers. The number is expected to go up to 40 percent in 2016. In addition to using SSDs in regular laptops along with cloud services, high-end gaming PCs also begin using SSDs to process higher-quality audio and visual effects and provide better gaming experiences. The mainstream storage size for laptops in 2016 is 128 GB, followed by those with 256 GB. There are a few noises in the market about 512GB options; laptops with such storage are not yet to become commonplace, due mainly to the prices.

Although SSDs perform faster and do not get bad factors like the hard dish drives (HDDs) do, SSDs cost more per storage unit. The current price difference between SSDs and HDDs is only US$5, but SSDs still cannot match up with HDDs in terms of storage capacity. HDDs still dominate large-capacity drives, but the gap is closing. Wang forecast a golden cross of 256GB SSDs and HHDs in 2016 and predicted that SSDs will become cheaper than HDDs.

▲ FORESEE SSD developed by Longsys. The product is gaining momentum in industrial PCs and automobile video surveillance systems. Its SSD lineup has expanded to X86-based industrial PCs, personal PCs, and data center servers.

SSD applications in servers

"SSDs could soon be commonplace and its advantages in servers will soon to be pointed out.” Most existing servers use Intel processors; despite their stellar performance, high power consumption and heating issues are also concerns. Longsys made a breakthrough with ARM-based low-power chips and SSD, which supports fast access, to provide an excellent alternative for users who do not simply pursue the ultimate performance over other factors.

ARM servers can satisfy speed-centric usages, such as e-commerce, online gaming, and chatting, in which SSDs can offer fast applications. Mixing both types of drives is also an option in ARM servers, in which frequently-accessed files are stored in SSD and less frequently-used files are stored in HDD.

▲Longsys’ partner AndromedaBox combines low-power consumption ARM with Longsys’ SSD, which offers fast access, to provide an alternative on the server market.

Market strategy for IoT business

Longsys in the near future will focus on mobile storage solutions, embedded storage systems, wireless storage, and IoT, with a particular interest in IoT. In April 2015, Longsys joined IoT alliance AllSee and subsequently separated its IoT division into a standalone business, renamed Longsys Technology. The subsidiary manages Longsys’ IoT business and works with Qualcomm. Longsys Technology develops IoT applications that use communication chips produced by Qualcomm. "As a matter of fact, consumers care much less about how IoT applications make the connections, as long as they all work well.” Longsys seeks to provide satisfactory services to the consumers.

Meanwhile, Longsys also form partnerships with internet companies, in which Longsys provides the storage equipment and the internet firms offer cloud services to allow users to access data in hard drives or via cloud platforms in a seamless fashion. For example, AirDisk products allow users to access files with their Tencent QQ accounts. From the business point of view, users do not need to know the exact location where the files are stored, as long as it is convenient for them to access the data.

Challenges brought by the emerging VR/AR

The development in VR/AR is expected to drive a wave of demand for video storage. Intel released a VR pack at Computex 2016. Intel’s VR pack requires 256GB and will propel a new demand for storage in drives. In addition to VR/AR, according to Wang, 3D, drones and 4K videos will also elevate the demand for storage.

Speaking of the company’s next step, Wang said the company will seek to proactively solve the problems faced by upstream and downstream suppliers and explore new opportunities in the storage business. He said that for instance, demand for storage devices on drones will arise when users want to stream videos from a drone but lack a stable internet connection.

Commenting on the process transitions for upstream manufacturers, Wang said Longsys also needs to make breakthroughs in its packaging and testing business, as chip production reaches 10nm node and approaches the limits of physics, both of which also make increasing the yield rate more challenging.

Longsys does not hesitate in investing in R&D, talent recruitment, and equipment. The company has plans to set up an R&D center in Silicon Valley and invest in a downstream packaging and testing facility in Brazil. New emerging industries are full of opportunities, as well as challenges. Many are anticipating new changes Longsys will bring to the industry, as the company continues its lead in the storage device market.