For most of the year, SSDs have been on a downtrend as storage prices have continued to rise, with this trend essentially starting as early as the second half of 2023. Fortunately, it looks like the cycle should finally break now and prices will hopefully begin to fall again. This is shown by the forecast of the development of the SSD market for the last quarter of the year, which has now been published by the analytical company TrendForce, which has been monitoring the prices of DRAM and NAND memories (and with them also of entire SSDs) for a long time.
According to TrendForce, the market is currently showing favorable factors for customers (and negative for manufacturers). Demand for storage and the NAND memories on which they are based turned out to be weaker than manufacturers had expected. In the second half of the year, demand tends to be seasonally stronger, for example because a number of manufacturers start buying more components for the annual release of a new generation of devices. However, this time the seasonal recovery in demand seems to be weaker than usual.
At the same time, NAND manufacturers had previously increased production with regard to higher expectations, so there was apparently an oversupply on the market (an excess of supply over demand), which, according to economic laws, leads to prices starting to fall. In case of an excess of demand, the buyer has to compete with a higher price for suppliers, while in case of an excess of supply (oversupply of the market), on the contrary, the seller has to compete (with a lower price) for the buyer.
According to TrendForce, this turnaround was already evident in the completed third quarter, but only to a limited extent. According to the company’s statistics, only the NAND chips themselves became cheaper in the third quarter – by 3-8% (this is a summary figure for ordinary 3D NAND type TLC and QLC). However, this discount has not yet been reflected in subsequent products. TrendForce reports that PC SSDs (Client SSDs) have increased in price by another 3-8%. However, eMMC and UFS storage used in mobile phones did not increase in price and their price remained roughly the same compared to Q2. On the contrary, the more demanding storage, for example for servers, became more expensive by 15-20%, the demand for them is strong.
SSD prices are past their peak and will continue to decline
In the current fourth quarter, however, prices will generally go down. Only server (enterprise) SSDs may still grow slightly (deterioration in prices by 0-5%), but regular SSDs for PCs are already set to become cheaper by 5-10%). Mobile storage (eMMC and UFS) is expected to become cheaper by 8-13%, which will be felt by device manufacturers and could theoretically lead to slightly better prices for new mobiles.
However, NAND Flash itself is expected to experience an even greater discount, in Q4 2024 its price is said to drop by 10-15%. If we assume that the development of the price of this “raw material” is ahead of the development of the prices of related products, this should mean that the oversupply of the market will persist and last again for several quarters. The higher discounting of NAND should then mean another discounting of SSD in Q1 2025, which will probably be more significant than that reported in the current quarter (minus 5-10%). Especially taking into account the fact that the first quarter already has a seasonally weaker demand.
TrendForce reports that inflation is working against manufacturers and that there is apparently not as much interest in AI PCs as expected (manufacturers expected a significant increase in PC sales from them), certain slowdowns or delays against plans are also occurring in the deployment of servers for AI services . The phone market has reportedly not seen the seasonal recovery that was expected, with users likely using phones longer and putting off replacing them. According to TrendForce, demand for SSDs, memory cards and flash drives itself was also weak (in this case throughout 2024), when the post-holiday shopping period in Europe and the US was not as strong as usual. And China is also apparently showing an economic slowdown.
NAND makers, on the other hand, have ramped up production – in part by deploying new processes and new multi-layer 3D NAND technologies that increase the capacity of the chips that can be made from a single wafer. Some of the manufacturers, which TrendForce does not name, but are said to be running their NAND Flash memory production lines at full capacity again, have thus canceled the temporary production restrictions, which they used to “stabilize” (or increase) the price after the previous price drop.
Both factors (weak demand and, on the contrary, increased production) naturally create space for the opposite phase of the price cycle to occur, which has been common for memory in recent decades. It seems that the discount should not be short. According to TrendForce, unfavorable conditions for manufacturers (and favorable for price) will continue beyond the end of the year and may worsen, and memory manufacturers will probably try to improve their sales by cutting prices, although the company has not yet given a forecast for Q1 2025.
SSD Crucial T500
Will the prices be as good or better than a year ago?
There is therefore a chance that the discounting will last for several quarters again and the effect will gradually accumulate. Unfortunately, we do not yet know whether the discounting will eventually be so deep that prices will go below the previous optimum in the second half of 2023. Of course, the best time to buy will have to wait during that cumulative discounting – it could occur in Q2 or Q3 2025 .
Of course, NAND manufacturers will step on the brakes again after some time and limit production so that the price does not collapse completely and they do not get into too much of a loss, so the cycle will probably repeat itself again. However, in terms of consumer prices, there will be an improvement for some time now.
Source: TrendForce
Source: www.cnews.cz
