SSDs are expected to become more expensive the coming time, prices of NAND flash memory have increased with 2-4% in second half of this month. SSD pricing is mainly based on the price of the main component of the drives, NAND flash memory.
Research company DRAMeXchange expects that NAND flash pricing will suffer from a temporarily supply shortage as manufacturers switch to new NAND production methods, due to the release of the next generation iPhone’s and the increasing popularity of SSDs.
Only Samsung will ramp up production of NAND, the Korean electronics giant increases manufacturing capacity in its Xian plant. Other manufacturers are not expected to follow, Micron just recently converted a DRAM factory to a NAND factory, and Toshiba’s new NAND fab will not be ready before the end of this year.
NAND shortage is also caused by manufacturers switching to smaller NAND, and as they are first unexperienced with the production methods, yields will be lower at the beginning.
The increase in demand is not only caused by a growing popularity of SSDs and the launch of new iPhone and Ipads (of which the NAND is mainly manufactured by Sandisk and partly by SK Hynix), but also due to the large amount of smartphones sold in China. DRAMeXchange expects demand for NAND for the Chinese smartphone market will grow with 53% this year.
Despite the expected shortage of NAND, all manufacturers are working hard to bring down the prices of NAND flash memory. By shrinking the NAND cells they are able to cut costs as the amount of chips per wafer goes up. Nevertheless, prices of SSDs will likely not come down as much as the last couple of years, with currently prices close to $0.50 per GB for cheaper SSDs.
According to sources of Digitimes, Micron limits its supplies to external parties to secure cheap flash memory for its Crucial brand. The sources also claim that sales of Crucial branded SSDs double every quarter.
The growth of the SSD market is not only fueled by consumers but also by enterprises and data centers that are switching from HDDs to SSD.