The prices of storage chips are rising amidst fluctuations.

Recently, the price fluctuations of chips in one of the largest electronic malls in the country, Huaqiangbei, have been noticeable, with storage chips being the most prominent. Some merchants have reported that since April, the prices of storage products have increased by 10% to 20%.

However, some merchants have indicated that the prices of storage products have not changed significantly recently or have even decreased, which is due to the lack of a clear rebound in demand for electronic products.

Several computer assembly and storage product merchants have revealed that the business of assembling computers and servers has been lackluster recently, with demand not showing a clear recovery. As for whether storage chip manufacturers will continue to control production and raise prices, it is still unclear, making it impossible to judge the price trend of semiconductors, including storage chips.

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From interviews with multiple Huaqiangbei merchants, it is understood that among chips related to computers, the prices of GPUs and CPUs have been basically stable, with the main price fluctuations occurring in storage chips.

"The prices of storage products have increased after the earthquake in the Taiwan region. Since April, the price increase of Micron products has been more than 20%, other brands have increased by more than 10%, and overall, there has been a 10% to 20% increase," said one computer assembly merchant. Another computer assembly merchant also stated that memory has been the most noticeable in recent price changes, along with other component price changes, resulting in a price increase of about 200 yuan per computer, which has affected the business of the store.

"From April to now, the prices of storage products have increased by 10% to 20%, but compared to the first quarter of this year, the price increase is not as aggressive," said a merchant specializing in selling storage products. Another solid-state drive (SSD) merchant revealed that this year, the prices of SSDs have been on an upward trend, and the price increase trend from before has continued into April.

The prices of storage products are fluctuating, and merchants' perceptions are not entirely the same. The lack of a clear price change from upstream is affected by the sudden event of the Taiwan earthquake. A domestic storage brand merchant who sells memory modules, embedded storage, and SSDs also stated that originally, the prices of storage products increased in the first quarter, but after the Taiwan earthquake, the prices of their products decreased, with each product decreasing by several tens of yuan. Behind the price reduction, the merchant targets both individual and enterprise sellers, and the demand in both markets is relatively quiet. At the same time, the original storage chip manufacturers may also be clearing their inventory, which has affected the original price increase trend.Multiple merchants in Huaqiangbei have indicated that chip prices are changing daily, and it is currently impossible to discern significant factors affecting market prices, making it difficult to predict the next price trend. "The impact of the Taiwan earthquake may still need to be reflected slowly, and we cannot rule out the possibility of subsequent price increases for storage products. However, it's hard to say; if we could predict a price increase, we could stock up now," said one merchant.

SSD Prices Continue to Rise

A Gartner report points out that the demand for storage chips will make a strong recovery in 2024, with revenue estimated to surge by 66.3%. The prediction soon became a reality, as many "big players" in the storage industry announced price increases: according to a report by BusinessKorea, Samsung plans to raise the prices of enterprise-grade solid-state drives (SSDs) by 20%-25% in the second quarter, aiming to reverse the downward trend since 2023. Initially, Samsung planned to increase prices by about 15% from the previous quarter. However, due to higher-than-expected demand, Samsung decided to widen the price increase; on April 9, market insiders revealed that Micron has proposed to most customers to raise the second-quarter product prices, with an increase of more than 20%; on April 10, Western Digital stated that there is a supply shortage for both its hard disk drives (HDDs) and SSDs. Moreover, the demand for flash memory products has also exceeded expectations, so the prices for flash memory and hard disk products will continue to be adjusted this quarter, with some changes taking effect immediately; HDD manufacturer Seagate Technology has also recently sent a price increase letter to customers, announcing that it will immediately raise prices for new orders and demand exceeding previously committed quantities.

At the beginning of 2024, NAND flash memory prices started to rise continuously, with an overall increase of 23-28% in the first quarter, and an expected increase of 13-18% in the second quarter, which is reflected in the terminal SSD market, with some products even doubling in price. In addition, over the past two weeks, the industry has frequently reported shortages of enterprise-grade SSDs, and TrendForce believes that, benefiting from the growing demand of communication service providers in North America and China, it is expected that the procurement volume of enterprise-grade SSDs will increase quarter-on-quarter in the first half of this year.

2024 will be a pivotal year for the recovery of the storage industry. Affected by factors such as the pandemic and economic instability, the global consumer electronics market has experienced a two-year decline. With the booming development of artificial intelligence, the popularization of generative AI, and the widespread application of AI technology in PCs and mobile phones, AI PCs and AI mobile phones have also ushered in a new round of explosive growth. Terminal manufacturers such as PCs and smartphones are expected to usher in a recovery in demand, driving the price increase of NAND Flash and other storage.

Moreover, the rapid development of artificial intelligence technology has also driven an explosive growth in the demand for storage performance. This change will also help the transformation and upgrading of the entire industry. Citigroup analysts point out that SSDs will become a part of AI and may replace HDDs for AI use. Because SSDs are more suitable for AI training applications, their speed is 40 times faster than HDDs. Data centers of top US technology companies are shifting from HDDs to enterprise-grade SSDs. This trend has also greatly increased the demand for storage devices, leading to a tight supply of SSDs.

In the current situation where demand has increased significantly, some buyers are trying to increase inventory levels before the peak season in the second half of the year, and it is expected that the contract price of enterprise-grade SSDs will rise by 20%-25% in the second quarter. Industry analysis suggests that, benefiting from the rising demand of cloud service providers (CSPs) in North America and China, it is expected that the procurement volume of enterprise-grade SSDs will grow quarter-on-quarter in the first half of 2024. It is estimated that the contract price of enterprise-grade SSDs in the second quarter of this year will increase by 20-25%, which is the highest increase for all product lines. The increase for consumer-grade SSDs in the second quarter is about 10-15%.