The price of higher-capacity consumer SSDs will "skyrocket" this quarter as NAND packages consisting of four and eight NAND devices are already in short supply, an industry source told Tom's Hardware. Some price upticks are starting to show in retail already, but sudden shortages of critical 4- and 8-die NAND packages will spur more significant price increases expected to hit later in the quarter.
A single-sided SSD in an M.2-2280 form factor can carry four 3D NAND packages. Modern 2TB and 4TB drives in this form factor tend to use packages consisting of four or eight 3D NAND devices to ensure high performance. There is already a shortage of these packages today as SSD makers are struggling to find adequate supply. Some suppliers are already raising their quotes, which will affect SSD prices, with the shortages filtering down as higher pricing for end users over the coming months.
It may take two to three months before the full impact of the NAND package shortages works its way into the supply chain when pricing for some of the best 2TB and 4TB SSDs is set to 'skyrocket,' the source noted.
There are several reasons why the supply of higher-capacity 3D NAND packages may be limited. On the one hand, makers of 3D NAND have cut memory production in recent quarters due to low demand and said they would slow down the transition to nodes that enable higher bit densities. This greatly reduces the amount of flash capacity supplied to the market.
Furthermore, as reported by TrendForce, some buyers are increasing their purchases despite a low-demand season in the first quarter of 2024, leading to a rise in 3D NAND contract prices by 15% to 20%. This increase is a response to suppliers' strategies to minimize losses and manufacturers' aggressive price hikes, with future price trends depending on enterprise SSD procurement.
The market for consumer SSDs, particularly among PC OEMs, is reaching a peak in purchasing, driven by the growing adoption of PCIe 4.0 SSDs. In response to this demand and the need to balance their books, suppliers are raising prices for PCIe 4.0 products, the report says. This trend is expected to result in a 15%–20% jump in PC client SSD contract prices. The acceptance of these new rates is more likely among notebook makers. Meanwhile, prices of some popular SSDs have increased in the last several weeks at CamelCamelCamel.
By contrast, the enterprise SSD market shows a different dynamic. While demand from North American Cloud Service Providers (CSPs) remains tepid, Chinese CSPs and server brands are offsetting this, keeping the market robust. This activity, combined with suppliers' firm pricing strategies, is anticipated to propel enterprise SSD contract prices by about 18% to 23% for the quarter, according to TrendForce.
