Hard drives are now being sold at elevated prices and the sector is even experiencing shortages thanks to AI-driven demand, which has similarly boosted prices for SSDs and GPUs.

At least one hard drive manufacturer, Western Digital, has expressed its intentions to raise hard drive prices per a letter shared by TrendForce. The letter, penned by channel SVP Scott Davis on April 8, says: "Western Digital is seeing higher than expected demand across its entire flash and hard drive portfolio resulting in supply constraints."

Davis goes on to add that Western Digital "will continue to implement price increases on flash and hard drive products this quarter, with some changes taking effect immediately." An earlier letter from December indicated hard drives would experience price jumps throughout the first half of 2024.

As for the whole market, Taiwan-based TechNews says hard drive prices have risen 10 to 20 percent since Q3 of last year. This is apparently thanks to high capacity drives, which are in high demand for AI-powered servers and datacenters, while smaller capacity drives (defined as 2 TB or less in this report) are seeing a decline in price. Prices are expected to increase by a further 5 to 10 percent in the second quarter.

High demand is seemingly not the only reason why prices are gradually ticking up for hard drives. Manufacturers cut production by 20 percent in 2023, according to the TechNews report, to keep hard drive prices from falling in the face of lowered demand in a weakening global economy. This ended up pushing prices up rather than keeping them stable thanks to increased demand from the AI sector, but there are reportedly no plans to restore production as manufacturers want to keep prices elevated.

Given that there's a divide between hard drives for consumers and those for servers, the impact on consumer-grade hard drive prices should in theory be low. However, looking at pricing history for individual hard drives on CamelCamelCamel indicates this might not be the case. Many multi-terabyte drives from Western Digital and Seagate have seen higher prices on Amazon since Q3 of last year, even those that are purely advertised for regular PCs.

However, hard drive prices for retail are still down from their high in 2021, even with the latest price bumps over the past few months.

Similarly, SSD prices have also been going up across the board, with enterprise-grade drives seeing especially large price hikes. Samsung apparently intends to raise its enterprise SSD prices by 15 percent in the second quarter. ®

https://www.theregister.com//2024/04/10/ai_boom_is_boosting_demand/