The client’s acceptance of the storage manufacturers’ price increase has driven SSD prices up for three consecutive quarters, with the rate of increase expanding. Whether prices can continue to rise in the future depends on the demand for generative AI.
SSD prices continue to rise, with the wholesale price (bulk transaction price) of the benchmark TLC 256GB product at around $32.8 per unit during the April-June 2024 period, up 15% from the previous quarter (January-March 2024). The price of the larger 512GB capacity is about $61.5 per unit, also up 15% from the previous quarter. This marks the third consecutive quarter of price increases, with the rate of increase expanding from the previous quarter’s 10-12% rise. SSD wholesale prices are determined once every quarter by storage manufacturers and buyers.
Since the fall of 2021, SSD prices have been declining for about two years. Due to the sluggish market, storage manufacturers reduced the production of key component NAND Flash, leading to a tightening of SSD supply. The price increase requests made by storage manufacturers to improve profitability were accepted by buyers (clients). However, an electronics trading company stated, “Inventory has not yet cleared, and there is no sense of shortage. The recovery in demand has not been as expected.” Another executive from an electronics trading company pointed out, “The rate of price increase for SSDs from July to September is likely to slow down compared to April to June.”
The focus going forward will be on the demand trends for generative AI.
An executive from an electronics trading company noted, “Storage used in generative AI servers requires three times the amount of NAND Flash as usual, so if the demand for storage for generative AI increases, it is likely to drive up SSD prices.”
Japanese research company Techno Systems Research indicated that the global shipment of SSDs in 2024 is estimated to be 355 million units, an 11% increase year-on-year (an increase of 35.2 million units).
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