No reprieve in sight: firms struggle with SSD shortage
EP&T MagazineElectronics shortage SSD SSD shortage
There are no signs of recovery from the SSD shortage previously reported by Fusion Worldwide. With manufacturers cutting NAND flash production in 2019, demand for storage capacity growing and unforeseen events affecting supply, manufacturers are still struggling to meet the intensifying demand for SSDs – causing lead times to stretch to a minimum of 10 weeks.
Demand for SSDs is expected to grow at a compound annual gross rate of 15 percent for the next four years and is forecast to reach $70 billion by 2024. This is caused by the growth of big data in IoT devices and enterprise applications needing faster storage. SSDs are also the best in executing large data used in smart devices, wireless technologies and advanced systems found in vehicles.
IoT demand, hyperscale and gaming advancements
“With the rollout of 5G, increased IoT demand, hyperscale and gaming advancements requiring more storage, there are no signs of recovery for the SSD shortage,” said Mavis Ong, Fusion Worldwide’s global finished goods commodity manager. “Because of this, buyers who are looking to buy these components should expect high prices to remain while the shortage continues. Those who wait for prices to lower before purchasing could be in for a very long wait.”
SSD supply has also been affected by many events outside of manufacturers’ control. In 2019, the Toshiba power outage caused a larger than expected disruption on supply, and the US-China tariff caused manufacturers to cut and/or move SSD production.
Impacting SSD and DRAM production
As 2020 approached, new unforeseen events have occurred. On New Year’s Eve, a power outage at Hwaseonong Korean factory disrupted the production of DRAM and NAND flash chips – the effects of which are yet to be fully felt.
On Jan. 7, a fire broke out at a Kioxia facility, which has already started impacting SSD and DRAM production. In more recent news, the Coronavirus outbreak has already caused the Chinese government to start shutting down companies operating within various cities, including Guangdong and Shanghai in an effort to control the spread of the virus. With many manufacturing facilities being restricted, global supply chains relying on Chinese output will continue to be affected.
Worst lead time, supply and costs
Intel is struggling the most to recover from the shortage as it manages the worst lead time, supply and costs compared to competitors. Intel has also recently notified customers that the cost of all SSDs will be increasing 10-15% in February.
While companies attempt to remedy the short supply, reportedly Samsung’s current solution is to add capacity to increase production of NAND wafers. Although this may eventually help the shortage subside, it will still require a massive amount of time and effort for these components to recuperate the market.