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SSD prices face uncertain future in 2014

Mark Hachman | Jan. 20, 2014
Technology advances fail to budge SSD buyers from trying to paying as little as they can for the most storage possible. But SSD pricing for 2014 is uncertain. Here's why.

intel ssd

The slow pace of change in the flash-manufacturing industry means that prices of SSDs will likely hold steady compared to 2013, but price hikes could be in the offing.

In short, expect to spend about 75 cents per gigabyte (GB) on an SSD in 2014, according to Jim Handy, an analyst with Objective Analysis. The average capacity drive that makers produce should be about 200GB—relatively tiny as far as consumer storage goes, but in line with corporate policies that call for keeping data on corporate servers where it can be managed.

And while some manufacturers try to differentiate their products through technologies that can improve performance, it's not clear how much they're succeeding. That's forcing SSD manufacturers into direct competition, where price is the differentiating factor.

The bottom line is that SSDs still are a capacity game: people buy the largest amount of storage they can within their budget, and they ignore the rest, Handy said.

The appeal of solid-state discs are undeniable, especially in an increasingly mobile world. Over the long run, flash chips within SSDs are generally faster and consume less power than a spinning, traditional hard drive. SSDs are also rugged, withstanding drops and jars that can cause a hard drive to crash.

But SSDs are also more expensive on a dollars-per-GB basis than a hard drive, and if an SSD does fail—a real rarity these days, granted—data isn't as recoverable as a hard drive. With that said, SSDs are one of the most effective upgrades for an older PC. They're predicted to capture more and more of the storage market over time, with traditional hard drives remaining relatively static, according to iSuppli.

According to Handy, however, the market is heading into what he calls a "capital spending-driven manufacturing shortage." In 2011, he said, "the bottom fell out of the flash market. Nobody was making money, nobody invested, and two years later, there's a shortage."

Last September, a fire at DRAM provider SK Hynix helped stabilize the price of flash memory, as vendors shifted their flash manufacturing lines to meet the sudden shortage of DRAM. That helped lift flash prices, too—helped more by strong demand for Apple's iPhone 5, according to Chris Geiser, a senior product marketing manager for memory and storage with Samsung, whose semiconductor division is the world leader in flash memory.

But then, confusion: some topline manufacturers ended up dumping SSDs during Black Friday 2013, roiling the market. So, while capacity shortages may raise prices, nervous vendors needing to make sales goals may end up suddenly dumping drives. And that leaves some executives cautious.

"I don't know what the [2014 pricing] trend is going to look like, and that didn't happen in 2013," Geiser said.


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