For the past year, SSDs have never been cheaper — with many 1TB SSDs actually costing less than 1TB HDDs. But this era of cheap memory may be coming to an end: controller-manufacturer Phison is signaling that a shortage of materials needed to make NAND chips may be on the horizon, according to a report from Digitimes.
Phison, which makes memory controllers for SSDs (including many or even most PCIe 5.0 SSDs), is prepaying its chip suppliers to ensure it has plenty of NAND chips as the company predicts a shortage. The prepayment itself will presumably bump up the cost for NAND chips, and a shortage absolutely would — likely causing a very significant jump in SSD prices down the line.
The SSD market has seen declining demand ever since the COVID-19 pandemic, but 2023 saw what may be the most rapid drop in SSD prices ever. Production was simply far above demand for too long, and price cuts were the only realistic way to raise demand. Manufacturers have also been decreasing production to reduce supply, but the looming shortage of materials may force supply to further constrict.
But even before considering this potential shortage, we're already seeing the effects of companies clearing out stock and cutting production. SSD prices have been levelling out, and have even been slightly increasing (though some of this could be from retailers getting ready for Black Friday/holiday sales). Many SSDs that became popular for being cheap (like Solidigm's P41 Plus 1TB) are now difficult to find at all — let alone at the super low price points seen in recent months.
It's good news for the manufacturers however, who have been hemorrhaging money while there's been a glut of supply. In May, Phison cautioned that low NAND prices might cause bankruptcies as the largest manufacturers had lost billions of dollars. However, as prices are being pushed up by a lack of supply (as well as potentially increasing demand according to Phison), the NAND crisis seems to be coming to an end.
