SSDs poised to get a lot cheaper

Oversupply and seasonal weakness combine for a potential big drop in SSD prices.

SSDs poised to get a lot cheaper

If you are SSD shopping for your servers, you might want to wait a little because a market research firm that follows this sector said conditions are ripe for price drops in the coming months.

DRAMeXchange, a division of market research firm TrendForce, forecasts that the average selling prices (ASP) of NAND Flash will drop by around 10 percent quarter over quarter respectively in the third and fourth quarters of 2018.

Usually Q3 is the time of peak demand as OEMs ramp up manufacturing for the Christmas holiday, but the growth of the end-market demand has been weaker than anticipated. At the same time, the supply of 3D-NAND Flash continues to expand.

There are multiple reasons for that, too. First smartphone sales this year are expected to be flat. Second, notebook shipments were very strong the first half of 2018, so the seasonal shipment growth for notebooks in the second half of 2018 will be lackluster compared with the growth in the year’s first half as the base period.

Third, and this is the part we care about, the competition is very intense in the server solid-state drive (SSD) market. While there is steady demand for server-side SSD, there is an oversupply of server SSDs because too many suppliers are playing in this segment, which is much more profitable than consumer.

Finally, NAND Flash suppliers have raised their output forecasts as they have expanded their production capacity and improved the yield rates of 64/72-layer 3D-NAND. They are also making a big push into 96-layer 3D-NAND, which will mean higher capacity drives.

Expect weak prices on NAND Flash products

Given the above factors that have led to a persistent oversupply, DRAMeXchange predicts contract prices of various NAND Flash products will remain weak through the rest of this year.

And it won’t change any time soon. DRAMeXchange anticipates continuing price decline during the traditional slow season of the first half of 2019. Again, it cites increased production on the part of memory makers as the reason for the oversupply.

With all the advances coming in enterprise SSD, waiting might not be a bad idea. Western Digital just announced its first NVMe drive, and other vendors are also bringing NVMe drives to market. These are far more flexible drives in terms of use scenarios and worth waiting for.

So by all means, check with your vendor’s product roadmap.


Copyright © 2018 IDG Communications, Inc.

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