Samsung is increasing SSD prices, but that may be for a good reason as the AI boom begins to reach its peak
Samsung Electronics has announced plans to increase the price of its business SSDs by 20-25% in the second quarter of 2024. This is a significant increase from the initially expected 15%, with the price increase attributed to the booming AI industry.
In recent weeks, there has been a global shortage of NAND flash enterprise SSDs, a situation due to high demand from new data centers and the rapid expansion of AI-related storage servers.
An insider from the semiconductor industry said this BusinessKorea“Server companies looking to expand their storage capacity have been rushing their SSD orders lately, and some products are even experiencing shortages, leading to increased production considerations.”
The same price increase everywhere
Samsung has significant influence on pricing decisions, as it supplies approximately 50% of the enterprise SSD market. TrendForce estimates that where Samsung leads, others will follow, with the 20-25% price increase reflected across the board.
TrendForceBryan Ao says: “As large-capacity SSD orders experience low fulfillment rates, suppliers continue to influence pricing trends, likely forcing buyers to accept higher prices. While some buyers look to increase their inventory levels ahead of the peak season in the second half of 24, contract prices for Enterprise SSDs are expected to increase 20-25% in the second quarter, marking the highest increase across all product lines.”
This increase is unique to enterprise SSDs, with eMMC and consumer SSDs becoming only 10-15% more expensive in the second quarter.
If The register reports: “Since much of the SSD market growth is supported by AI-driven demand, a lot is riding on AI’s success. If a bubble forms and it bursts, those super-expensive SSDs will not only have turned out to be a pretty bad deal in retrospect, but SSD manufacturers like Samsung will see an important source of incremental revenue evaporate. As long as the money for expensive computer parts continues to come, there is nothing to worry about. No pressure.”