According to market analysis firm TrendForce, DIY and PC enthusiasts should be looking forward to some appetizing price cuts to the Best SSDs on the market. Should current market trends play out, TrendForce expects consumer SSD prices to decline anywhere from 3~8% as soon as 3Q2022 due to NAND oversupply.
TrendForce's analysis indicates that client SSD shipments are still filling backstopped orders hailing from 2021's significant SSD sales, but a reduction in orders for 2022 will be the main cause for the expected oversupply.
|Client SSD||+ 3~8%||- 3~8%|
|Enterprise SSD||+ 5~10%||~0%|
|3D NAND Wafers||- 8~13%||- 5~10%|
|eMMC UFS||+ 3~8%||- 3~8%|
|Total NAND Flash||+ 3~8%||- 0~5%|
There are a number of factors at play here: for one, there's lower demand from customers, who loaded up on technology following the COVID-19 pandemic and the work-from-home craze. On the other hand, rising inflation and the global economic downturn have seen companies across the world (from Chinese phone manufacturers to other consumer-facing product lines) tighten their belts, aiming to increase money-at-hand at the cost of reducing stock - and incurring the risk of not being able to fulfill new orders.
Despite consumer-facing orders being down in the red, HPC (High Performance Computing) orders are expected to increase 10% in 2022, with the enterprise sector also showing signs of continued investment in storage technologies. TrendForce thus expects enterprise SSD prices to stay roughly in line with 2021 pricing.
News of a NAND oversupply is particularly interesting, considering that NAND production suffered a serious blow in February this year, due to a materials contamination that hit two of Western Digital and Kioxia's joint venture factories in the Yokkaichi and Kiakami provinces, Japan. That particular incident stopped the factories cold for 21 days and rendered as many as 7 Exabytes of NAND unusable - representing around 3.38% of the total annual NAND production for 2021, which came in at a mind-boggling 207 Exabytes spread over 333 million SSDs. After this squeeze in NAND supply, prices dropping as much as 8% must signify that demand is indeed extremely low.
Yet due to the lower sales throughout the start of 2022 and orders for Q3 of the same year, NAND manufacturers have already dropped wafer prices for TLC and QLC NAND by 8~13% in Q2 2022, with a further 5~10% reduction expected for Q3.
eMMC (NAND's slower cousin that's frequently found in low-cost products such as Chromebooks) is also expected to see a global price decline of 3~8%. It's likely that consumers will have more difficulty in seeing these prices translate into lower end-user pricing, however, due to the thinner margins for manufacturers and the less significant contribution of eMMC to the BoM (Bill of Materials) of products it goes into.
The DIY and enthusiast PC market is still reeling from months of being squeezed by tight supplies and absurdly high prices. Recently, we've been granted a breather of shorts on the GPU space as well, with Chinese miners dumping their high-cost GPUs at fire-sale prices in wake of the still-ongoing crypto winter and the (still) impending end of Proof of Work on Ethereum (dubbed "The Merge"), which will kill GPU mining. The further expectation of lowered end-user SSD pricing is nothing but a boon in this economy.