SSDs: WTF?

SSD prices are currently surging, mirroring previous price increases seen in RAM and GPUs. This is attributed to several factors, including unforeseen data center flash storage demand, a hard drive shortage, manufacturers prioritizing higher-margin enterprise SSDs, and some manufacturers intentionally cutting output to protect profitability. The situation is reminiscent of past DRAM cartel activities, with many of the same companies involved. NAND spot prices, specifically for 512 Gbit TLC supply, have increased by nearly nine times in six months, from $2.70 to over $23. This significant increase has not yet fully translated to consumer device prices but is starting to. For example, the average 2TB SATA SSD price has risen from $150 to $350, and the average 2TB NVMe SSD from $190 to $450. Faison, a NAND controller manufacturer, is reportedly requesting prepayments, with its CEO noting an 8GB eMMC module price increase from $1.50 to $20 last year and a fulfillment rate under 30%. Valve has cited memory and storage shortages for its Steam Deck being out of stock. Major manufacturers like Kioxia and Western Digital have indicated that their production for upcoming years is already sold out, with Western Digital attributing 89% of its second-quarter revenue to the cloud segment. Despite the high demand, reports suggest that some manufacturers, including Samsung and SK hynix, are intentionally constraining supply and prioritizing enterprise SSDs. Samsung reportedly lowered its NAND wafer output from 4.9 million last year to 4.68 million this year, and SK hynix is expected to follow a similar path. This production cut is occurring even as global NAND demand, particularly from AI storage and data centers, is projected to increase significantly. For instance, NVIDIA's ICMS platform for server solutions is estimated to represent 2.8% of global NAND demand in 2026 and 9.3% in 2027. TrendForce states that this surge in NAND flash demand is "structural, not temporary," driven by AI storage needs and hard drive shortages. An industry manager from Kingston noted in December that SSD prices were expected to increase significantly by January or February. Nvidia CEO Jensen Huang has also commented that "everything being scarce is fantastic for us," referring to the companies involved in DRAM and flash memory supply. NAND flash is nonvolatile storage, unlike volatile DRAM, but both markets share similar characteristics, including coming from largely the same manufacturers. Samsung, Micron, and SK hynix control a combined 62.9% of the NAND flash market, while Kioxia, SanDisk, and YMTC make up the remainder. Both markets typically follow a cyclical pricing pattern, but the current demand influx is causing abnormal and consistent price increases. Examining spot prices, DDR5 16 Gbit session averages skyrocketed from under $10 in October to over $35 by February, now approaching $40. This represents a 6 to 6.7x increase since late August last year. 512 Gbit TLC NAND spot prices, which were around $2.50 to $3 until October, have increased to a current session average of $23, an 8.5 to 9x increase since September, surpassing DDR5 in terms of percentage increase. DDR4 16 Gbit also saw a dramatic surge, rising from about $8 in August to nearly $80 by mid-January, likely due to end-of-life announcements and stockpiling demand. When normalized for previously stable prices, 512 Gbit TLC SSD prices have seen an 8.6x multiplier, significantly worse than DDR5's approaching 7x multiplier. While DDR5 RAM kits currently show greater percentage increases in finished product pricing, it is anticipated that SSD market prices will eventually exceed DDR5's increases as the market catches up to spot price changes. This lag may be due to buffer supply and slower consumer awareness. Consumer NVMe SSD prices for 2TB M.2 drives have also surged. For example, Crucial's P310 rose from $145 to $300, Kingston's NV3 from $150 to $380 (a 153% increase), and Samsung's 990 Pro from $190 to $400 (a 111% increase). On average, these NVMe SSDs have seen a 113.7% increase in the past four months. Even SSDs using NAND from Chinese newcomer YMTC, like the Fanchion S880, have experienced similar increases, though they often remain competitively priced at the lower end. For 2.5-inch SATA SSDs, which are becoming less common, prices have also risen. PNY CS900 increased from $153 to $220, and Team Group's TF Force Vulcan nearly doubled from $118 to $230. The average price for these SATA SSDs inflated by 76.3% within a four-month span. Hard drives, while not using NAND flash, are also experiencing price increases due to manufacturing limitations and high data center demand. The average 16TB hard drive price has climbed from $350 to $440, a 25% increase in a few months, modest compared to SSDs but still notable. The reasons for these price increases are multifaceted: 1. **Hard drive shortage:** A sudden shortage has accelerated data centers' transition to SSDs, coinciding with unforeseen storage demand. 2. **AI Data Center Demand:** AI data centers have reserved significant portions of future supply. For instance, Western Digital's 2026 supply is largely sold out to AI data centers. Nvidia's new server solutions are projected to require massive amounts of additional SSD NAND, significantly impacting global demand. Microsoft, Azure, and AWS are also buying hundreds of thousands of SSDs quarterly for AI inference clusters. 3. **Manufacturing Shift and Supply Cuts:** NAND manufacturers are shifting production capacity from consumer SSDs to higher-margin enterprise SSDs. Furthermore, despite surging demand, some manufacturers like Samsung and SK hynix have reportedly cut NAND production from last year's output, potentially to maintain higher prices and profitability. This also allows Chinese NAND makers like YMTC to increase their market share. The conclusion is that SSD prices are "absurd" and are likely to worsen before they improve, following a trajectory similar to RAM prices. The consumer market is expected to see a sudden surge in pricing as the buffered impact of spot price changes subsides. TrendForce forecasts strong pricing momentum throughout 2026 due to limited NAND capacity expansion and surging AI demand. There is little consumers can do to mitigate these increases.