SSD prices likely to skyrocket again

The SSD market is currently experiencing turbulent times: While end users are hoping for falling prices, the AI ​​explosion is driving up demand. TrendForce is predicting a massive increase – with far-reaching consequences for companies and private customers. Western Digital

AI boom causes SSD prices to skyrocket

Bad news for anyone who was hoping for cheaper SSDs: The market for solid-state drives is currently developing in a completely different direction than many consumers had hoped. According to a recent analysis by Market research company TrendForce The SSD industry is facing a real boom, but not to the benefit of end customers.

The main driver of this development is the explosive growth of AI applications. The increasing demand for powerful infrastructure for artificial intelligence is causing a massive increase in SSD orders. TrendForce expects demand to increase by a whopping 60 percent in the coming years. In response, manufacturers are raising their prices across the board.

Why AI is turning the SSD market upside down

There are many reasons for the AI-driven SSD boom. Solid-state drives play a central role in AI infrastructure:

• Low latency: SSDs offer significantly faster access times than conventional hard disk drives (HDDs). In the AI ​​era, where every millisecond counts, this is a decisive advantage.
• AI model storage: SSDs are great for storing model parameters and creating checkpoints, allowing for quick recovery in case of interruptions.
• Real-time updates: SSDs are essential for inference tasks where AI models need to be updated in real time.
• High capacities: AI applications require enormous storage capacities. SSDs with at least 16 TB of storage space are in demand and significantly more expensive than comparable HDDs.
• Reliability: According to data from cloud storage provider Backblaze, SSDs show lower quarterly and annual failure rates compared to HDDs. However, it should be noted that HDDs have more internal data, making a completely fair comparison difficult.

Dramatic price increase already noticeable

The effects of this development are already clearly noticeable. TrendForce reports a noticeable increase in the price of SSDs:

• In just three quarters, SSD prices rose by 80 percent.
• By 2024, the total capacity of SSDs procured for AI purposes is expected to exceed 45 exabytes (45 million terabytes).

Private users affected

The price increase is not limited to the enterprise sector. Consumer SSDs have also seen significant and sustained price increases for several quarters. The reason is the limited availability of NAND flash memory, the heart of every SSD. A look at current street prices of various SSD models, which TrendForce updates every two weeks, shows the volatility of the market:

Brand Specification Series Capacity High Low Average Change

Historical context and future prospects

These figures make it clear that prices even for consumer SSDs fluctuate greatly and are already rising in some cases. To better understand the current situation, it is worth taking a look at the history of SSD technology:

• Development: SSDs were developed in the second half of the 20th century.
• Price decline: Initially expensive, the cost per gigabyte fell steadily over a long period of time, similar to Moore’s Law.
• Current situation: At the beginning of 2023, the price per gigabyte for SSDs was still about twice that of a conventional hard drive.

A ray of hope on the horizon?

However, there are also signs of a possible easing of the market. According to insider reports, the largest NAND flash memory manufacturers are currently ramping up production again. This could lead to improved availability and possibly a stabilization of prices in the medium term. Nevertheless, the enormous influence of the AI ​​industry on the SSD market is expected to continue for many quarters to come. Both companies and private customers must prepare for persistently high prices.

The development clearly shows how strongly the AI ​​boom is already radiating into other technology areas and causing distortions there. How do you see the development? Do you think the SSD market will calm down again soon, or do you expect prices to continue to rise? Share your assessments in the comments!

Amit Gohar