Storage crisis: Flash is scarcer than ever
Flash memory is becoming scarce and expensive, while DRAM prices are rising sharply and hard drives have long delivery times.
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SSD manufacturers reportedly paid US$4.80 for common 1 TBit TLC NAND chips in July, but they are now trading at US$10.70. This was stated by Khein-Seng Pua, CEO of SSD controller manufacturer Phison, to the Asian online magazine Digitimes. Even older MLC chips, which can only store two bits per cell, have doubled in price.
Therefore, retail prices for SSDs are likely to rise in Europe as well. Some, but not all, models are already showing a clear upward price trend on online price comparison sites.
The reason for the shortage is the global boom in artificial intelligence. This has led to a severe shortage of memory chips. According to Pua, the imbalance between supply and demand will persist for several more years as chip manufacturers remain very cautious about building new factories.
Another reason for the scarcity is the shortage of server hard drives. Delivery times are currently around one year, and according to some reports, even two years. Many operators of large data centers are therefore reportedly already switching to the more expensive but more readily available QLC SSDs. Currently, around 20 percent of installed storage capacity consists of SSDs, a doubling since 2020. This share will continue to grow in the coming years.
All major NAND manufacturers announced price increases as early as March 2025. This development results from massive production cuts between 15 and 25 percent since the fourth quarter of 2024, with which manufacturers reacted to the oversupply that will continue until the end of 2024.
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According to a report, Sandisk is now even increasing its prices by 50 percent, after the company had only informed its customers about a 10 percent price increase in September. It is unclear which storage types are affected.
The QLC flash production for next year is reportedly already practically sold out, Digitimes has learned. This is also likely to lead to significant price increases, especially for client SSDs.
Long-term supply contracts help
SSD manufacturers that are also flash manufacturers themselves are in the best position. Samsung, SK Hynix, Micron (Crucial), Sandisk, and Kioxia can adjust their production to their needs.
Long-term supply contracts, whether for raw flash wafers or finished chips, are also advantageous. For example, Phison has already secured the necessary memory for the coming year, according to its statements, and the company's demand is high: Phison manufactures SSDs as a contract manufacturer for many well-known brands, including Adata, Corsair, Nextorage, or Seagate.
Small SSD manufacturers that purchase the necessary flash components on the so-called spot market are likely to be at a disadvantage. Prices there follow demand. Market observers expect bankruptcies of smaller manufacturers, or at least their exit from the SSD business.
Building new flash factories takes years and costs billions, so a rapid recovery is not to be expected. However, manufacturers regularly discontinue the production of older flash technologies and retool their facilities for more modern production processes. But even such a conversion takes up to a year with the necessary fine-tuning, so this also does not promise quick success. One should not currently expect falling prices for flash, hard drives, or even DRAM.
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