SSD prices have been continuously falling since the autumn of 2021 for about two years. However, the sluggish SSD market has seen a complete turnaround this year. The bulk transaction price from April to June increased by about 15% compared to the previous quarter, marking three consecutive quarters of growth.

During the April to June 2024 period, the wholesale price (bulk transaction price) of the benchmark SSD product TLC 256GB was around $32.8 per unit, up 15% from the previous quarter (January to March 2024), while the price of the larger 512GB capacity was around $61.5 per unit, also up 15% from the previous quarter. Prices have risen for three consecutive quarters, with the growth rate showing an expanding trend compared to the previous quarter (up 10-12%).

Factors Affecting SSD Price Changes in 2024

The price change of SSD in 2024 is mainly influenced by two factors: NAND and AI.

1. NAND Flash Memory

The main component influencing SSD prices is the market trend of NAND flash memory. NAND is a type of semiconductor memory, and SSDs often come with multiple NAND units. Companies like Samsung Electronics, SK Hynix, Micron Technology, Western Digital, and Kioxia Holdings are global giants in both products.

Due to the decline in digital product demand brought by the COVID-19 pandemic, the NAND market has been very sluggish. This has led to continuous price drops for SSDs since autumn 2021. The decline in sales of manufacturers, suffering from poor performance, began cutting production in the second half of 2022 to improve profitability and have since pushed for price increases in negotiations. Device manufacturers, as buyers, have accepted these price increases to ensure stable supply, resulting in higher SSD prices.

2. Artificial Intelligence

Artificial intelligence is a key driver of the current market recovery and a major factor behind the rising prices of storage products.

The rapid development of AI is significantly increasing the demand for high-performance SSDs. As essential storage devices in AI applications, SSDs need to handle vast amounts of data quickly and efficiently. Training complex machine learning models and performing large-scale data analyses require numerous high-speed read and write operations, making high-performance, high-capacity SSDs the preferred choice.

In data centers, SSDs are widely used to support AI workloads, providing low latency and high throughput data storage solutions. Edge computing devices are also starting to use SSDs to meet the needs of real-time data processing and analysis. This broad demand has intensified competition for high-end SSDs, driving up overall prices.

To meet this demand, SSD manufacturers have to invest more resources in technology innovation and research and development, such as improving controllers, optimizing firmware, and increasing storage density. These increased R&D and production costs inevitably pass on to product prices. Additionally, technological breakthroughs and new applications in the AI field further escalate the demand for high-performance SSDs, potentially leading to short-term market supply shortages and price increases.

Current SSD Market Conditions

Global Market Scale

The global SSD market was valued at approximately USD 34 billion in 2023 and is expected to grow at a compound annual growth rate (CAGR) of around 15% from 2023 to 2028.

Global SSD Shipments

Global SSD demand continues to recover in 2024, with a 4% increase compared to 2023. After enjoying "bargain prices" over the past two years, current SSD prices now seem steep. This increase is due to significant production cuts by upstream manufacturers and rising demand, leading to a steady rise in NAND flash and SSD prices since the latter half of last year. Despite the significant rise in NAND flash prices, the surge is not over. According to TrendForce, the NAND flash market is expected to see a price increase of about 23-28% in the first quarter of 2024 and an overall increase of 13-18% in the second quarter. This indicates that SSD product prices will continue their upward trend throughout 2024.

2024 Technological Developments

1. Capacity and Speed

SSD capacity and speed continue to improve. Current SSD capacities have exceeded several terabytes, and speeds have increased from a few hundred MB/s with SATA interfaces to several thousand MB/s with NVMe interfaces.

2. Interface Types

• SATA Interface: SATA interface is the traditional interface, still widely used but gradually being replaced by newer technologies.

• NVMe Interface: NVMe SSDs communicate directly with the CPU via the PCIe interface, significantly improving data transfer speeds and becoming the mainstream choice.

• U.2 and M.2 Interfaces: U.2 interfaces are mainly used in enterprise equipment, while M.2 interfaces are widely used in consumer markets, including laptops and desktops, due to their compact size.

3. Advancements in NAND Flash Technology

• 3D NAND: 3D NAND technology increases storage density by vertically stacking storage cells, reducing costs.

• QLC (Quad-Level Cell) and PLC (Penta-Level Cell): QLC and PLC NAND flash further enhance storage density but also bring challenges in write endurance and performance.

4. Low Latency and High Endurance

High-end enterprise SSD products focus on low latency and high endurance, suitable for data centers and high-performance computing environments. They use SLC (Single-Level Cell) or MLC (Multi-Level Cell) NAND flash to provide higher write endurance.

Price Trend Forecast for the Second Half of the Year

Despite initial hopes for recovery, SSD prices will continue rising from July to September. While various factors influence these prices, recent trends indicate that the increase will be smaller than earlier in the year. However, major manufacturers have indicated that the supply of NAND flash, a key component in SSDs, will be insufficient after the third quarter. This shortage is likely to drive prices up as demand from enterprise storage and data centers remains strong. As a result, consumers can expect SSD prices to rise in the coming months, making it a challenging time for those with urgent storage needs.

How to Deal with Price Volatility

Facing the constantly fluctuating SSD market, how to respond to price changes and adopt suitable purchasing strategies has become a concern for enterprises and individual consumers. For enterprises, long-term planning is crucial, while for individual consumers, assessing actual needs and seizing the right purchase timing are key.

For Individuals

For ordinary consumers, KingSpec provides several suggestions:

• Buy Early: If you have an actual need to purchase an SSD and the budget allows, consider buying early when prices are lower. SSD prices are on the rise. If there are recent promotions or special offers, don't hesitate to seize these opportunities to save costs.

• Assess Personal Needs: Before purchasing, carefully evaluate your storage needs. Based on how you use your computer and the frequency, choose the appropriate SSD capacity and performance. For example, gamers or those who frequently handle large files may prefer high-speed SSDs. For general document processing and daily use, affordable SSDs with average performance are also a good choice.

• Protection and Maintenance: After purchase, regularly back up important data and use appropriate data management tools to optimize SSD usage and performance. Also, regularly update firmware and avoid prolonged high-load operation to extend the SSD's lifespan.

For Enterprises

In the face of continued SSD price volatility, enterprises need to adopt a number of strategies to safeguard business continuity and cost effectiveness.

• Performance Optimization: Evaluate the performance needs and data storage volumes of enterprise applications to ensure the selection of appropriate SSD technology and specifications. For example, data centers requiring high throughput and low latency should prioritize NVMe SSDs.

• Capacity Planning: Use a storage tiering strategy, storing hot data on high-performance SSDs and migrating cold data to more economical storage media, such as HDDs or cloud storage, to optimize overall costs.

• Cost Control: Employ cost-benefit analysis, considering the initial cost, energy efficiency, maintenance costs, and expected lifespan of SSDs to select the most economical storage solution.

• Supply Chain Management: Establish strategic partnerships with suppliers to secure more competitive prices and priority supply through long-term contracts or volume commitments.