SSD Prices Skyrocket As NAND Shortage Deepens, HDD Shortage Looms As Components Become Scarce

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why_wolf

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In related news RAM prices are also way up. After hitting a low point this summer all the prices have started ticking back up. From what I can tell the RAM I bought last month for $80 only cost $60 back in June.

My, albiet limited, understanding is some of this was from a factory problem, ever increasing smartphone demand and conversion of factory space to SSD production instead.

Would be interesting to see a more in depth report on it as well.
 

TechMivec

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I feel as though many employees and managers at these production facilities just take off for vacation or whatever towards the end of the year and no one else is there to make up for it.

This is not the first time during the holiday season that supply has shorted and prices are higher than the rest of the year is it? A quick search showed shortages in 2013, 2012, 2009 in the second half of the year. I question whether the powers-that-be allow shortages to occur to increase revenue.
 

why_wolf

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That wouldn't surprise me. If supply/demand is out of wack they would start diverting supply from some poorer markets to rack in more money from countries that can absorb higher prices better.
 

kletkeman

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Hmmm ... prices conveniently rising as the holiday season approaches when demand is at its peak. Absolutely nothing suspicious about that :)
 

OfficialG3

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this is the problem with new tech releasing way to quick, people keep on transitioning to the newer market, however it left some behind, not to mention if people transition way to quick the demand is higher than supply so it rises the price, and because of this manufacturer cuts other to fill that demand, but compromise the other segment, causing imbalance in supply & demand in everything, and in the end we were the one that gets the end result, prices rising up and supplies going down
 

chicofehr

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I desperately need more storage space but don't have any spending money now. When I do the prices will be very high.

I wonder if this will effect RAM prices too?
 

MrLehi99

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Well, I'm glad I just bought my WD Black 6TB drive. I'm guessing it will be substantially more expensive come Spring.
 

Vosgy

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I was talking to one of our companies suppliers earlier today, turns our they purchased a whole bunch of SSD's at the lower price in prep for the coming price hike.

Over all it is disappointing for me, a few friends want me to build them new PC's shortly, but if the prices go up too much that may be postponed, and I like making PC's :D
 

Tanyac

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...It appears the end of low-priced storage is nigh,

Low-Priced storage in Australia ended just prior to mid 2014. Prices in some areas have increased by as much as 40%. Prices have remained fairly static since then, with only minor fluctuations and the occasional promotional offer
 

mqualls2

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Could it be, companies monopolize the nand fabs, create the shortage, and then just raise the price? And there's nothing that a consumer can do about it. Because you either pay or do without. It's a big game. I have some were from 5 to ten year old equipment with mlc ssds and ddr2/ddr3 memory and quad 4 / 8 processor and my systems seem mighty fast, and my ssds are fast in read and write. I wanted to eventually up grade but refuse to because of the games that these companies play, so ill wait maybe 5 more years.
 

The biggest holiday in Asia is the Lunar (Chinese) New Year, usually in late January or early February. Christmas/New Year's is more a Western holiday. If you're American, the Lunar New Year in Asian cultures is like Christmas, New Year's, and Thanksgiving all rolled together into one. It's not unheard of for people to spend over 24 hours in a continuous traffic jam to drive to their hometown for the holiday.


The NAND and RAM markets are extremely competitive, which means the profit margins are very slim. Unfortunately they have to plan production volumes a few months in advance, so they're all guessing how much demand there will actually be. They tend to err on the safe side because if they make too much, due to the slim margins they'll frequently end up having to sell what they make at a loss.

Most of the RAM and SSD prices you may remember as being "low" over the years, you were actually buying it for less than production cost. The manufacturers overproduced, resulting in a glut. That depressed prices resulting in them having to sell the products at a loss in order to recoup as much as they could of their initial investment. (There is no law that says people have to buy your product for more than it cost you to make it.) If you don't understand why a company would willingly sell products at a loss, I suggest you read up on the wikipedia entry on sunk costs. One of my previous mangers didn't understand sunk costs, and refused to cut the price of our 80286 laptops to below their production cost. As a result, our company got stuck with millions of dollars of inventory in unsold 286 laptops, when 386 processors were being phased out in favor of the 486, making it practically impossible to even give away the 286 laptops.
https://en.wikipedia.org/wiki/Sunk_costs

This year you had a trifecta of factors causing manufacturers to play it safe. The global economy was still in the throes of recession but struggling to climb out, so nobody was really sure if it would improve by the end of the year. Uncertainty about who was going to win the U.S. election and thus determine future U.S. trade policy. And Intel/Micron making a lot of noise about 3D XPoint entering the market in late 2016 and how it was going to obliterate flash-based SSDs in performance. All these resulted in manufacturers doing the safe thing and limiting production.

The economy is now doing better (at least in the U.S.) than most economists predicted 3-6 months ago. Although a Trump victory was widely seen as depressing global trade, now that he's actually won the market seems to have decided it doesn't really matter. And so far I haven't heard a peep out of Intel and Micron about 3D XPoint. This has resulted in stronger holiday sales than expected, and thus a shortage in NAND supply. On top of that, the transition to smaller NAND dies has proven rockier and slower than expected, crimping supply even more.

There's no grand conspiracy here. Simple supply and demand. As the article states, Tom's Hardware predicted this possibility even as far back as May.
 

sillynilly

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So a price increase during the holiday season is a surprise to anyone? Wow, I guess maybe we are shocked when gas goes up right before Summer.
 
While Solandri is correct, much of the low prices of RAM were caused by a glut and the subsequent price increase was necessary to keep companies afloat, the changes for NAND are more than a little extreme even given the situation and the SMR HDD problem is blatantly intentional. There is no excuse for putting an SMR hard drive in a consumer product, especially when there are no warnings, not even in the manuals that consumers don't read.

I should mention that with RAM, it's also a little different. RAM is rarely a large part of a computer budget (for consumers at least), so even with it roughly doubling in price, it's not a terrible thing. The same price increase happens with NAND and now there's a problem. NAND companies really should pay more attention and I wouldn't be surprised if the shortage is at least partially intentional. It wouldn't be the first time such a thing happened, not even in recent years.

Besides, in all honesty, global recession hasn't stopped NAND from growing. The whole time problems were worse, NAND kept growing in market share. Besides that, while US trade is important, nothing will stop NAND from moving between national borders because it is too important a product. That people were able to calm down after Trump wins tells me it didn't matter who won. Hillary wasn't going to do anything to get in the way of this and if Trumps victory doesn't stop things from moving back to normal, than I don't know what possibly could.

Finally, a point on 3D-Xpoint: New memory technologies take years after actually launching in products to actually matter these days. How long did it take NAND SSDs to go from that cool toy we read about in benchmarks to actually being in many home computers? We're still working on that. 3D-Xpoint isn't a threat to consumer NAND sales for sure. Enterprise sales, it probably isn't a threat as even if it is superior in performance, its endurance didn't pan out enough to really win and it won't be produced in enough volume to hurt NAND much for the first few years unless Intel and Micron buck the trend of new technologies and sell it barely more expensive than NAND.

Will that happen? I don't know, maybe, but I'd bet not and if I was in with any of the NAND companies, I'd have put my money where my mouth is on this one. If we can see a shortage happening half a year in advance, then something should be done to prevent it. Whether or not it was intentionally caused, there is no debating that it was intentionally not solved in advance. They wanted higher prices, plain and simple. As a business, that makes sense, especially, as you said, when memory is such a competitive market and higher prices help the companies more than they hurt the consumers, but it's still annoying.
 
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