Samsung intended to raise prices on its enterprise SSDs by 15 percent in the second calendar quarter of 2024, but unrelentingly high demand boosted by AI might push that higher still.

SSDs have been getting more expensive since late last year, so it's nothing new to see bigger price tags as this year drags on. However, the same AI-driven demand for server-grade hardware stuffed with Nvidia H100 GPUs is now hitting enterprise SSDs, and prices might climb even higher than forecast.

As Business Korea reports, Samsung planned to up the price of its enterprise SSDs in Q2 by a relatively humble 15 percent. But in the face of increasing demand, the memory megacorp has decided on a boost of 20-25 percent.

An extra 5-10 percent here or there might not sound like much, but on datacenter scales it can make a big difference. Each individual server can be equipped with at least a few terabytes of storage, and when datacenters are composed of hundreds of nodes, increasing the price of SSDs is likely to have a material impact on customers' budgets.

A market analysis report from TrendForce also estimates that enterprise SSDs across the board will see a 20-25 percent jump in price. TrendForce points out that while a general increase in NAND flash prices is making all sorts of solid state devices more expensive, enterprise SSDs are uniquely seeing a high level of increased prices. eMMC and consumer SSDs are only getting 10-15 percent more expensive in Q2, which is still significant but not nearly as high as the hikes that enterprise drives may see.

Just a few months ago, prices were going down

These price increases mark a major reversal from what the market experienced throughout most of 2023. The fallout from the COVID-19 pandemic depressed spending on electronics, particularly affecting memory products including RAM and SSDs. At its lowest point in the summer and fall, consumers could buy brand-new 1 TB models of mid-range PCIe 4.0 SSDs for $50 or less, and sometimes as little as $35.

This was all thanks to high supply as demand declined at the end of 2022 but production wasn't cut until later. In 2023, Samsung and rivals SK hynix and Micron aimed to bring down production levels and clear out inventory, something they accomplished by the end of year, when NAND flash prices started to go up instead of down.

However, this may have been an over-correction given the massive quarter-to-quarter price increases so far for 2024. The entire SSD market in Q1 is estimated to have seen 23-28 percent higher prices than in Q4 of last year, according to TrendForce. An extra 20 or 25 more on top of that would make enterprise SSDs 50 percent or more expensive over the span of half a year.

With much of the growth of the SSD market being propped up by AI-induced demand, there's lots riding on AI being a success. After all, if there is a bubble and it pops, not only will those super-expensive SSDs have become a pretty bad deal in retrospect, but SSD makers like Samsung will see a major source of increasing revenue evaporate.

Just as long as the money for expensive computer components keeps coming, there's nothing to worry about. No pressure. ®

https://www.theregister.com//2024/04/02/samsung_enterprise_ssd_prices/