The best time to buy an SSD might right now
SSDs have been steadily getting cheaper for a long time now, often to prices undreamed of a few years ago. This was due to a slump in PC demand, which left the NAND Flash memory market oversupplied. Beware, however, this price drop seems to have bottomed out and prices are expected to start going up from autumn, or at best stay flat. So the time fo any storage upgrades may be now as SSDs may get more expensive in the coming months.
TrendForce has a been analysing and predicting the price trends of NAND memory (which is used in storage devices) and also of DRAM (i.e. RAM and graphics memory) for a long time, and its analysts are now reporting the end of the current streak of price decreases and the beginning of price movement in the opposite direction. The reason is that memory manufacturers are cutting back production due to weak demand and low prices. Generally price decreases are due to the excess of supply over demand, where manufacturers have to compete for “scarce” customers by lowering prices. However, this effect is reversed if production volumes decrease and demand starts to outweigh supply.
Production cutbacks are likely to be significant – Samsung will cut NAND production by 50% from September (in particular, it will reduce production of older generation chips with 128 layers or less). According to TrendForce, other manufacturers will follow suit, reducing production in an attempt to digest the remaining excess inventory that remains on the market from previous years.
According to TrendForce, the price falls are going stop and reverse. In both Q1 and Q2, NAND became 10–15% cheaper quarter-over-quarter, and by the end of Q3, TrendForce expects another 5–10% quarter-over-quarter price reduction (which is cumulative, and overall should work out to 24%–35% price reductions vs. 2022 year-end prices). But by the fourth quarter (October to December 2023), the tide will have turned and a 0–5% price increase is forecast. This means that the possibilities range from a scenario where prices remain the same between the end of September and December to a scenario where they increase by 5% quarter-on-quarter.
This is still an estimate for now; if there are any (sudden) changes to macroeconomic conditions, the final statistics may turn out differently, either to the benefit or detriment of manufacturers. But the final result probably won’t be dramatically different, so it’s safe to say that the time when it was worth waiting with SSD purchases is probably over and the ideal moment to pull the trigger may have arrived, or will soon arrive. Of course, this advice is only true if you have an actual need to buy an SSD; if a low price tempts you to buy something that wasn’t necessary, you obviously haven’t benefitted).
According to TrendForce, the selling prices of NAND chips have already gotten close to the production cost, so this is hardly a case to talk about any unfair market manipulation. Stopping production on at least part of the lines where margins are lowest makes economic sense. According to TrendForce, selling prices of chips in long-term contracts (i.e. not on the spot market) have already started to rise in August, suggesting that the assumption of price growth in Q4 2023 is warranted.
On the other hand, it doesn’t look like the reversal won’t become a steep movement where storage prices would rise as dramatically and continuously as during the previous price downturn. The ground for the price turnaround is not yet robust, according to TrendForce, and will require not only that manufacturers maintain the lowered production levels for a longer period of time, but also that there is robust demand for SSDs in the enterprise and server market.
Sources: TechPowerUp, TrendForce (TZ)
English translation and edit by Jozef Dudáš
⠀
