Storage crisis: Now data centers are also hoarding SSDs

The massive expansion of AI data centers is currently causing global bottlenecks in the storage market. Since classic hard drives are hardly available, companies are now buying up SSD stocks. This drives up prices for end consumers noticeably.

AI boom is making the storage crisis worse

The race for artificial intelligence has been causing drastic bottlenecks in IT hardware for weeks and months, and the high demand has long since reached the mass storage market. Cloud providers and AI companies are expanding their infrastructure and buying up the global market. The result is delivery times of over two years for enterprise hard drives and, more recently, skyrocketing prices for SSDs.

The reason is the limited production capacity of the manufacturers. Large producers such as Seagate or Western Digital work almost exclusively in the enterprise segment according to a “build-to-order” model. They only manufacture to direct order. It is hardly possible to ramp up production in the short term, especially since the dependence on neodymium for the magnets in hard drives represents an additional risk in the supply chain.

QLC technology as an emergency solution

Data centers cannot wait two years for new drives and are turning to alternatives. Like the Taiwanese industry media DigiTimes reported, a significant technological change is therefore taking place. For cost reasons, companies do not rely on the longer-lasting TLC-NAND (Triple Level Cell), but rather on QLC-NAND (Quad Level Cell). This technique stores four bits per cell and offers higher density.

QLC memory comes at the cost of space advantage with lower write speed and durability. However, for many “read-intensive” applications in AI models, this is sufficient because trained models primarily read data. The consequences of the onslaught are serious. The production capacities for QLC-NAND are fully booked for the entire year 2026 at some manufacturers. Analysts expect QLC to overtake TLC’s market share as early as 2027.

RAM price increase

In addition to hard drives and flash memory, the shortage also affects RAM. DRAM prices have increased by almost 50 percent in the last few weeks. One reason for this is the manufacturers’ focus on HBM (High Bandwidth Memory). This special memory is absolutely necessary for AI accelerators and is displacing the production of classic DDR5 RAM on the production lines.

For the first time, severe supply bottlenecks are occurring at the same time for HDDs, NAND flash and DRAM. Wallace Kou, President of Silicon Motion

Major semiconductor manufacturers such as Samsung and SK Hynix are prioritizing high-margin components for servers. For end users, this means that classic PC components and memory for smartphones will become more expensive and less available. Experts predict this situation until 2027 and it seems that the situation is getting a little worse every day.