Higher SSD Prices Incoming as NAND Shortage Looms

Over the past decade, storage capacities have ballooned massively. From the early days of the 64GB SSD, it’s now common to have 1TB drives floating around. At the same time, the economies of scale and improved process nodes have meant these increased capacities have come largely for free. Unfortunately for data storage hoarders, the good times appear to be coming to an end. Due to increased demand, NAND flash storage is now facing a potentially serious shortage.

Over the past quarter along, NAND prices have shot up by about up 10%. Looking at SSD prices, you wouldn’t be able to notice it but that because the impact hasn’t made its way to the consumer SSD market yet. Many manufacturers, especially third party ones without NAND production tend to stockpile NAND when its cheap and they’ve been doing so in the face of ever increasing demand. However, those stockpiles will eventually run out.

The price increase is largely due to increased demands from all sectors. All sorts of devices these days use NAND from SSDs, to smartphones and the biggest customer, the enterprise market. While production of NAND and investment in it is increasing, it hasn’t been able to keep up, leading to relatively low supply. There are some indications that suggest the pressure on prices will remain till late 2017.

Unfortunately for us, HDDs are also facing a shortage as well. Due to the general decline in HDD sales, production has started winding down. However, a recent resurgence in demand due again to enterprise has meant a shortage in that sector as well. Since production is unlikely to increase, the only hope would be for the enterprise to reduce their demand. With the growth in cloud storage and computing, that is unlikely to happen. 2017 looks to be turning into a perfect storm to drive storage prices higher than before.