Price Declines for Client SSDs Would Occur

This market report, published on October 22, 2024, was written on Trendfocus, Inc. Information Services.

SSD Pricing Trends: How Quickly Times Have Changed

What a difference 4 or 5 weeks can make! Expectations around market pricing for SSDs have recently shifted unexpectedly. We anticipated that price declines for client SSDs would occur before those for enterprise SSDs, and this has indeed happened.

However, the timing for this decline has accelerated. Several factors have contributed to this. The channel and retail markets have shown softness for 3 consecutive quarters, without a significant uptick in demand from major PC OEMs.

Healthy (higher) inventory levels at PC OEMs, combined with the continued lack of strong demand in the mobile market have led to a downturn in overall market pricing. The significant price hikes observed since the 4Q23 are now waning, if not reversing in the current quarter. This trend is expected to persist next year. While there is hope that a PC refresh could boost demand and potentially stabilize pricing later in the year, optimism remains cautious.

For enterprise SSDs, price declines will occur sooner than anticipated but will lag behind those of client SSDs by at least a quarter. Positive trends for enterprise SSDs include a sustained increase in demand; however, there are signs of slight cracks in this trend.

Elevated inventory levels, delays in major system buildouts, and the introduction of new form factors and higher-density deployments are all playing a role. While demand for 2024 is still significantly higher than in 2023, it appears that pricing has peaked. The market may have reached its limit regarding the substantial increases seen in recent months. Similar to client SSDs, the trajectory for enterprise SSD pricing declines in the coming year will largely depend on the extent of any price concessions in 1H24.

Various external factors could also influence these trends. It’s impossible to predict power outages, natural disasters, or production cuts. Should the PC OEM market, or especially the mobile market, experience a sudden increase in demand, the pricing trajectory could look significantly different than it does currently.