Hope for Lower SSD Prices by Year-End as South Korean Manufacturers Ramp Up NAND Production

South Korean NAND flash chip manufacturers have begun to increase their production capacities, signaling a potential decrease in solid-state drive (SSD) prices by the end of the year.

Last year, prices for SSDs and similar products were at a near all-time low due to a combination of factors including ample supply, stagnant market demand, and intense competition among manufacturers.

However, by the end of last year, prices for SSD-related products started to gradually increase. The price of SSDs primarily depends on the cost of NAND flash chips. Leading companies, including Samsung, initially reduced their production capacities to decrease supply and stabilize prices. Western Digital scaled back its NAND factory capacity to below 50%, SK Hynix also cut back on production, and Samsung eventually decided to reduce its capacity as well.

Following these capacity reductions, the artificial intelligence industry experienced explosive growth, leading to a significant increase in storage demands and, consequently, a rise in NAND chip prices.

Given the growing market demand and the profitable prices for NAND manufacturers, the competitive market advantage has become apparent: companies such as Samsung, SK Hynix, KIOXIA, and Western Digital have started to increase their production capacities in hopes of selling more products and securing profits sooner.

Reports from South Korean websites suggest that the demand for flash memory, especially high-end NAND products suitable for AI data centers, has significantly increased in 2024. This demand has prompted NAND manufacturers to once again boost their production capacities.

Samsung's NAND flash chip production capacity has recovered to about 70% of its previous levels, SK Hynix has increased the production capacity for high-capacity NAND products, and the joint NAND factory operated by Western Digital and KIOXIA has also ramped up to about 90% capacity.

An increase in production capacity means the supply in the market will gradually grow. Although consumer-grade SSDs were not specifically mentioned, it is expected that their prices will stabilize or decrease after a period of increased production.

Those planning to build a new PC or upgrade their SSD may want to keep a close eye on the situation, especially the forecasts made by market analysis firms like TrendForce, known for their relatively high accuracy in predictions.