The SSD, the storage revolution that gives us the ability to increasingly take the bottleneck burden off of our storage devices, is actually quickly falling victim to its own success. The increasingly high demand of NAND for our SSDs has caused a supply shortage as fabs struggle to align output with that demand. And now prices are slowly increasing.
Your future SSD is only going to get more expensive
The prices for MLC NAND alone have increased by around 10% throughout the quarter, while TLC NAND has increased nearly 9% in price according to DRAMeXchange. That isn’t an insignificant difference. That can eventually mean a 10-15% increase passed on to the consumer. We were getting quite used to seeing several great, inexpensive SSD solutions available. The fabrication labs can increase their capacity, though not nearly at the rate that is being called for by consumers and businesses alike. That and there are only so many manufacturers of NAND, with Samsung being the largest supplier. The SSD market, though, is looking fairly good with a good spread of OEMs.
The enterprise sector is also making the rapid switch to a solid state environment as durability has been increased with the development of 3D processes, among other things. Enterprise, data centers and businesses are likely the largest mass buyers of the technology. They too will have to think twice about continuing that upgrade path, as we too look towards whether or not the cost is actually justified going forward.
With prices rising and storage still being something we need, traditional HDDs might also see a price increase due to a strained supply line. To help cut costs, some HDD vendors have already cut production, due to demand being lower than usual. Third parties that vendors source their parts from are also cutting capacity. This will inevitably lead to a shortage of platter-based storage as well. High-capacity storage has seen a fairly nice increase in sales, around 15% over last quarter, though vendors are still not entirely prepared for any larger of an increase in demand. We could see a strange scenario with a reverse of what we’ve enjoyed thus far. It seems the storage bubble has been popped, but hopefully only temporarily.