According to a recent report by market analysis firm TrendForce, NAND flash memory prices are expected to jump 50% in the short term, ultimately leading to higher prices for SSDs.
Already in the second half of 2023, NAND memories have already seen a significant cost increase, but further growth is expected as flash memory manufacturers try to return to profitability. The 50% growth rate reported by TrendForce is targeted by companies such as Samsung, SK Hynix and Micron, which produce much of the global NAND memory supply. At current prices, a 40% increase would bring companies back to break-even, while a 50% increase would mean profits instead of the losses that threatened many companies with bankruptcy earlier this year.
Price fluctuations are already evident in the NAND memory market, which is tracked by the website DRAMeXchange. Since July 2022, when NAND prices hit their lowest point, we have seen progressively higher prices every month. Today, prices for 512GB TLC chips are 120% higher than in July, while 256GB and 128GB TLC are not far behind at 60% and 22% respectively. From 6/12 to today, prices for 512GB, 256GB, and 128GB TLC NAND increased by 7.4%, 4.2%, and 4.6%, respectively.
A further 50% increase would bring prices to July 2021 levels. According to TrendForce and Toms Hardware, the reason for lower prices is reduced production, and under the classic supply/demand model, as supply decreases with steady or increasing demand, prices rise. Samsung has cut production by 50% since September, even though the market has already seen price appreciation due to inventory clearance. At the same time, we have already seen increased prices in the SSD category on popular models, such as the MX500 1TB, which cost around $48 in September but is now $65, marking a 35% increase.
If prices rise 50% from here, the MX500 and other 1TV-capacity SSDs will hit $100, the typical price for those models in the first half of 2022. For consumers, paying twice the price for the same product is disappointing. On the other hand, this is great news for the memory industry. The first half of the year has been a tough one for the industry, especially for Micron, which posted a $2.3 billion loss in the first quarter. While it makes sense that people would prefer cheap PC components, these prices would not be sustainable.
For now the market remains well below the highs of 2021 and early 2022, however the industry is trying to get back to that level.
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