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Solid state disks to get 5-10 percent more expensive in Q2 2017?

Posted on Sunday, February 26 2017 @ 09:58:59 CET by


Market research firm DRAMeXchange provides an update about the NAND flash memory market and it's bad news if you're in the market for a new disk. Pricing of solid state disks saw a big increase in recent months, a quick check of a disk I bought in July 2016 reveals the same product is now over 20 percent more expensive!

The reason for this is tight supply of NAND flash memory and there's no improvement expected the coming months as DRAMeXchange predicts contract prices of SSDs will increase by another 5-10 percent in Q2 2017. At the same time, the computer industry is also seeing big price increases for DRAM and LCD panels.
The global supply of 2D-NAND Flash will remain tight going into the second quarter of 2017, according to the latest analysis from DRAMeXchange, a division of TrendForce. Also, major smartphone brands will soon begin their first wave of new product release for the year after the Mobile World Congress in Spain. With the NAND Flash supply still under strain, DRAMeXchange forecasts that contract prices of both SSDs and eMMCs will see a more moderate sequential price hike of 5~10% in the second quarter.

The end of 2016 saw the most severe phase of shortage in the NAND Flash market, and since then the market expectation of undersupply has kept prices climbing. For the first quarter of 2017, DRAMeXchange estimates that the average sequential increases in contract prices of eMMCs and SSDs will come to 15~20% and 10~15%, respectively. The sequential contract price increase for SSDs in the first quarter will also be the highest in almost two years.

Apart from the pressure of soaring NAND Flash prices, smartphone and notebook brands are also dealing with sharp price upswings for other key components such as DRAM and LCD panels. In order to keep costs down and maintain healthy margins, device vendors will implement measures that will also lead to slowing growth in the average content per box for eMMCs and SSDs in the near future.

“The accumulated price increase in the NAND Flash market has become so huge that device vendors are currently revising their initial plans to raise the storage specifications of their products,” said Sean Yang, research director of DRAMeXchange. “Though the NAND Flash market will remain strong the second quarter of this year, eMMCs and SSDs will see a more moderate hike in their contract prices compared with increases of the previous quarters.”

Looking ahead to the rest of 2017, the market for enterprise-grade SSDs constitutes the strongest and most stable source of end demand for NAND Flash compared with other applications. Server vendors are enjoying booming growth of data centers, and this is also driving their use of high-efficiency enterprise-grade SSDs when designing their systems. As for the client-grade SSD market, the growth in the average content per box will slow down this year due to the high NAND Flash prices. Nonetheless, SSDs have become standard in notebooks and their penetration in the notebook market will continue to rise through 2017.

Yang in his analysis also pointed out the next iPhone release in the second half of this year will be an important indicator of the NAND Flash market. “The 10th anniversary iPhone devices will come with major hardware upgrades and many new features,” said Yang. “If they do well in sales, it will help keep up NAND Flash demand in the latter half of 2017.”




 



 

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