Rising Need of PCIe in Data Centers to Drive Their Applications in Storage Solutions

The patent scenario for Peripheral Component Interconnect Express is evolving owing to the technological development due to the rise of blockchain and acceleration of AI and machine learning. Additionally, the evolving data center due to the ongoing shift to cloud computing is leading to enhancement of the PCIe market. This scenario is being driven by the need for increased data transfer speeds driven in part by new standards of PCIe being developed. While shifting from PCIe 3.0 to PCIe 4.0 due to technical difficulties in upping the peripheral bus bandwidth, according to the specifications for the PCIe 5.0 and PCIe 6.0 speed bumps on the PCI-Express roadmap, things are starting to look up on the peripheral bandwidth front and a much shorter two-year cadence is now possible. This is projected to continue at least for the next several years, while long term reduction in technology roadmap timelines might be more difficult to achieve. However from 2022 onwards, this could start getting a lot harder to implement based on the physics of wires and PHYs and the limitations therein. However, the backward compatibility maintained by PCI-SIG in new iterations of PCIe will enable a faster transition period going from spec detailing to product implementation. Gen 6.0 will be the first version of PCIe that will utilize PAM4 signaling and forward error correction. The connectors are expected to remain fully backward compatible with all prior versions of PCIe. In applications where exceptionally long channels are required, PCIe over optical fiber is the solution. With Gen 6.0 reaching product launch status, the next steps would be to identify potential capabilities and roadmap for PCIe 7.0 and the generations going forward as well.

The penetration of IoT & connected devices in the consumer vertical such as smart home cameras and security systems, voice assistants, smart appliances, smartphones, laptops, gaming consoles, smart mobility solutions and so on is increasing at an unprecedented rate in recent years, majorly due to the increasing coverage of high-speed internet and network coverage. All these devices are integrated with memory chips for data storage and processing resulting to the increase in the demand for these components where PCIe adoption comes into the forefront. The growing millennial population with tech savvy habits and growing disposable incomes are set to be the major factors driving the demand for memory and storage components in the future. In the commercial sector as well, the penetration of IoT systems is growing for asset tracking, virtual payments, environmental monitoring, access control and various others. This is also set to drive the demand for memory and storage components in the future. The increasing need for faster transfer speed in applications such as machine learning and artificial intelligence will lead to the continuous up-gradation of generations for PCIe. Additionally, the demand for fewer lanes that can achieve faster speeds and the miniaturization of peripheral and the integration of various components on a single IC board will lead to the need for more advanced PCIe generations. Moreover, the deployment of technology in automotive industry such as the introduction to self-driving cars, and increasing use of IoT applications is leading to the need for higher bandwidths and enhances data transmission which is further leading to the demand for up-gradation of PCIe.

Industry4.0, the fourth industrial revolution which is a coalescence of IT and OT is penetrating various industry verticals such as aerospace and defense, oil and gas, food and beverage, chemicals, mining, agriculture, logistics and transportation, marine, utilities and so on, at a faster pace than expected given its benefits to optimize process and costs. The growing penetration of digitalization in these verticals to monitor, optimize and control is also driving the demand for discrete computing architecture to reduce the latencies. These discrete computing systems also integrate memory and storage components for data storage and processing which is further set to buoy the demand these components. In April 2021, Rolls Royce announced that it has been recognized by the US Department of Commerce for a major investment of more than $600 million in facilities in Indianapolis for improving intelligent manufacturing capabilities. Such investments towards adoption of Industry4.0 is set to be a growth driver for the memory and storage components as well. Industrial SSDs have long been used in applications like plant automation, medical care, and transportation. Edge computing and AI in IIoT applications are driving a need for faster storage, such as PCIe NVMe SSDs. The phenomenal growth of the AXI-PCIE Interface for Industrial Ethernet in the field of communication networks has allowed numerous applications in industries to run faster and more accurately. The reliability and advanced connectivity features of Ethernet are used in a variety of industrial applications where timing is critical.

The explosive growth of data generated from various sources and the shift towards cloud computing is resulting to the significant increase in establishments of data centers to handle the huge data traffic, processing the data as well as its storage. Servers deployed in the data centers are being upgraded with faster storage technologies such as SSDs and hybrid drives. For faster memory, aggressive steps are being taken by the OEMs to push the frontier of bandwidth, density, and capacity. In March 2021, Samsung launched 512GB DDR5 memory for data servers which are based on High K-metal gate technology and the fastest developed up to the date. The growing investments from the major tech companies for establishing new data centers is set to propel the demand for memory and storage components further. In March 2021, Google announced its plans to invest more than $7 billion to expand data centers and offices in the U.S. In the same month, NTT announced its plan to invest $2 billion in its Indian data center business over the next 3 years for expanding its capacity to 2.5 million sq. ft and 250MW of solar projects. Such investments on data centers are set to create a significant demand for memory and storage components in the coming years. The evolution of the data center is being shaped by a number of factors. Enterprise workloads are rapidly migrating to the cloud, whether they are hosted or collocated. Data centers are being architected to handle more east-west (within the data center) connectivity while the essence of workload traffic changes. The emphasis of virtualization is shifting from one computer running multiple processes to harnessing many processors to handle single, large workloads, with AI/ML (artificial intelligence/machine learning) being first and foremost. A common thread running across both of these trends is the exponential increase in data traffic and the need for ever-increasing bandwidth. Hyper-scale data centers are vital computing centers in a cloud setting, with vast computing horsepower and storage space built to serve a diverse set of internet applications and services. New data centers are being built as a result of the widespread introduction of smart technology such as smart devices, smart houses, and smartphones. To meet the growing demand for data center power systems, data centers must be strong, energy and cost-efficient, flexible, and responsive. As the next generation of the PCIe standard, PCIe 5.0 and PCIe 6.0 are the core interfaces that allow the data center to continue to advance high-speed computing and processing. Its bandwidth efficiency is critical as it provides the required communication speed between the network interfaces of servers and switches. It also serves as a vital bridge between CPUs and AI accelerators. Furthermore, more data migrates away from SAS/SATA and towards NVMe (nonvolatile memory express) over PCIe. Hyperscale data centers, 5G, cloud infrastructure, artificial intelligence (AI), deep learning, entertainment, visual computing, storage, and networking benefits from the PCIe 5.0 and 6.0 architecture and 400GE.

In the past 5 years, the penetration of semiconductor chips has witnessed multifold increase in the integration in devices with the advent of IoT spanning across all segments from consumer electronics, appliances, automobiles to industrial equipment. This explosion in the chip demand from burgeoning devices connected to the internet, surpassed the supply of the same. The chip products such as memory & shortage which was earlier confined to automotive sector branched across other verticals as well and the onset of COVID-19 pandemic further put strain on the supply. The pandemic resulted in overstocking of various devices such as laptops, desktops, gaming consoles and other electronic products by the consumers. Apart from this, the aversion for Chinese electronic products among the consumer space and sanctions against Chinese tech companies have further compounded towards worsening the situation. The sudden influx of consumers entering the crypto mining space in the 2020 due to job uncertainties arising due to the pandemic further appended towards the chip shortage. Memory devices such as mid to high end GPUs, SSDs, HDDs were bulk purchased by the consumers for setting up discrete crypto mining rigs at home or locally. Even the big crypto mining firms overpurchased memory devices, especially GPUs to expand their mining capacities. The new cryptocurrency Chia which uses proof of space time model instead of processing performance to mine as in case of Bitcoin resulted in bulk purchase of high-capacity HDDs and SSDs in the range 4TB to 18TB, especially from China creating a void in the supply. Currently the chip shortage has reached to a point where automakers are planning to cut down productions of various models and even shut down the plants in some cases. In March 2021, Chinese EV startup Nio, had to shut down its factory for 5 days due to chip shortage. The chip shortage further resulted to surge in prices of GPUs, SSDs and other memory devices with the supply chain still being bottlenecked due to second wave of the COVID-19 pandemic in early 2021. The uncertainties due to the onset of third variant of the Novel corona virus later in 2021, is further set to constrain the supply of the chips. Apart from this the supply and demand gap are set to continue through 2021 to the third quarter of 2022 during the market recovery, post the pandemic. 

Companies are significantly optimizing new technology which is leading to the adoption of solid-state drive (SSDs) technology. This technology is widely gaining traction owing to the light power usage, speed and small footprint. In addition, the rising demand for smartphones, laptops, computers and tablets are surging the demand for SSDs. The rise of SSD industry is therefore enhancing the need for PCIe-based SSDs which fulfils the demand for faster performance and lowest latency. Moreover, the ongoing deployment of data analytics in a number of industries is leading to the need for high-performance systems which will lead to opportunities for PCIe market. PCIe-based hardware is assisting to shape the future of computation. There has been observed improvement in transmission rates and the number of open lanes for continuous data distribution for each new phase of PCIe networking, allowing for greater volumes of data to be transmitted and used with less time. GPU use has risen dramatically over the last decade, owing largely to the entertainment and gaming industries. GPUs have been used extensively in both industries to produce more sophisticated computer graphic models and more complex and advanced games. On the other hand, the advances in computing applications such as graphics processing units (GPUs) for 3D video, and the need for faster data transmission will enhance the demand for PCIe technology. 

The march towards higher speed communications is not only pushing the frontiers of network infrastructure but also the hardware used for data storage and processing components. The fast-paced deployment and adoption of 4G, shifted the emphasis to memory and storage components with higher bandwidth, density, and capacity to match up with the higher data traffic speeds. Now with the upcoming 5G, the current memory and processing/networking technology is being enhanced to match up with the read/write data speeds. 5G is not only set to reform the consumer electronics supporting the same, but also the commercial and industrial communication systems. The transition from 4G to 5G is set to open new growth opportunities for storage and memory components featuring higher bandwidth and density in a more compact package. The ongoing massive data boom is not only due to the growing number of IoT/connected devices but also due to the reforms in the communication technology which allows data to be shared at higher speeds, thereby necessitating the demand for the chips which can support such speeds. The growing influx of data from numerous sources and data itself up turning to valuable resource of tomorrow, the need for data storage at massive scale is also increasing. The major IT companies across the globe are investing significantly to upscale their data center capacities, which is further creating a demand for server class memory and storage components. In the industrial space, the growing adoption of embedded system, edge computing/fog computing and discrete computing for digitalization is creating new growth avenues industrial class storage components as well as memory units which are designed to withstand harsh environmental conditions such as vibration, temperature, humidity and so on. Significant research and development activities are in way to overcome the current design bottlenecks in PCIe technology, one such being the data transfer speed. The PCIe interface forms the backbone which moves high bandwidth data between various nodes including CPUs, GPUs and so on which enhances the AI/ML workloads. The faster timelines to develop and implement new PCIe standards will result in significant overhaul in the market over next few years. However, the backwards computability of these new generation PCIe solutions will allow players to continue to develop earlier generations without requiring a significant shift to the new generations, thereby preserving the market for older generations as well.