Enterprise SSD Prices Likely to Increase by 15% in Q3 2021

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According to the latest report from Taiwanese analyst firm, TrendForce, the prices of enterprise-grade solid-state drives (SSDs) are likely to experience a price hike in Q321. As the report suggests, we could experience as much as a 15% increase in pricing for those SSDs.

Server shipments are expected to start a massive growth with the arrival of next-generation server platforms coming from the two largest processor suppliers: Intel and AMD. Given that these new platforms are often equipped with fast storage, enterprise SSDs represent the choice of storage solutions that go into these systems.

As the pandemic is slowing down, TrendForce predicts that the return to offices will drive IT spending further than ever, and storage will become one of the primary spending areas for IT departments. Intel is set to launch its Ice Lake Xeon processors, while AMD will launch its EPYC Milan line-up of server models, both are all going to drive a massive increase in server shipments. 

Global SSD production capacity will undergo a 7% QoQ increase, followed by huge demand. As supply fails to deliver the demand, price adjustment of 15% upwards will follow. Reportedly, Chinese hyperscalers Alibaba and ByteDance will increase their spending on IT equipment, which will drive enterprise SSD demand even further.

All of this adds up to enterprise SSD prices soaring upwards in the third quarter, however, a balance is expected to be seen in the fourth and final quarter of 2021. As the demand for server shipments slows down in Q4, so will the demand for enterprise SSD, and the increased pricing will adjust back to its normal fluctuations that we are witnessing as of writing this article. What that means for the future, we don't know. So far we can only look at a limited period ahead.

As far as new technology adoption in the enterprise area is concerned, TrendForce predicts that the adoption of PCIe 5.0 and CXL (Compute Express Link) from Intel Eagle Stream and AMD Genoa CPUs will drive the enterprise SSD demand further once these processors launch. Big memory makers like Micron are already in the development phase of CXL-enabled storage products, meaning that everyone expects the demand for these new technologies to be quite high. 

The next few quarters will represent a rollercoaster of prices for enterprise SSDs, with suppliers having to " jostle for market share by leveraging their respective unique competitive advantages", as the report notes.