Client-grade SSD prices are expected to experience the largest sequential increase in nearly a year in the fourth quarter of 2016, and will continue to rise in the first quarter of 2017, according to DRAMeXchange.
The average contract price for client-grade solid state drives (SSDs) is expected to experience the largest sequential increase in almost a year in the fourth quarter of 2016, according to DRAMeXchange, a division of TrendForce. Prices are forecast to continue upward in the first quarter of 2017.
DRAMeXchange reports that the average contract prices in the PC OEM market for mainstream client-grade SSDs using MLC NAND Flash will rise by six to 10 percent in the fourth quarter. For client-grade SSDs with TLC NAND Flash, average prices are forecast to increase by about six to nine percent sequentially.
Although DRAMeXchange anticipates conservative growth for SSDs in the first quarter of 2017, the market research firm expects prices to keep rising due to transition complications to the 3D-NAND technology and leading suppliers “maximizing their profitability.”
“The price gap of 128GB and 256GB SSDs versus 500 GB and 1TB HDDs grew larger than expected in the second half of 2016 due to the sharp rise in SSD prices,” said Alan Chen, senior research manager of DRAMeXchange, in a statement. “Nonetheless, SSD demand in the PC-OEM market is gaining strong momentum as SSDs in general have surpassed HDDs in terms of price to performance. The pace of SSD adoption in both consumer and commercial segments of the notebook market has exceeded DRAMeXchange’s estimation.”
“Irrespective of the under supply situation in the NAND Flash market, the SSD adoption rate in the global notebook market is certain to pass 30 percent this year. Furthermore, this figure is expected to be above 50 percent sometime within the 2017 to 2018 period,” Chen added.
Shipments of notebook SSDs in the PC OEM market expanded 25 to 26 percent sequentially in the third quarter, while the SSD adoption rate reached about 35 to 36 percent during the same period. DRAMeXchange attributes the third quarter growth rate to new product releases and the “traditional busy season."
The channel markets for SSDs globally have been impacted by the tightening supply and rising prices for NAND Flash, according to DRAMeXchange. The good news is that “memory module makers in the third quarter had sufficient chips on stock to fulfil orders from their customers,” according to Chen. This translated into an above-expected sequential increase for SSD shipments for channel players in the third quarter.
Shipments of client-grade SSDs (including products for notebooks, desktop PCs and channel markets) totaled 32.3 million units in the third quarter, up 15 to 20 percent from the previous quarter.
However, client-grade SSD shipments are expected to grow only two to three percent sequentially in the fourth quarter of 2016.
Currently, it’s not a good supply or pricing situation for buyers thanks to an under supply of NAND Flash, higher tags for TLC NAND chips, and low inventories of Flash memory at memory module makers, which is contributing to a low growth forecast in the fourth quarter. This also means SSD shipments in the channel will be constrained.
According to DRAMeXchange, a lot of the demand in the channel is for SATA III drives. Only a few PC OEMs committed to using PCIe for their client-grade SSDs in the second half of 2016, which means SATA III is still the dominant interface technology this year, according to Chen.
“While the global market share of SSDs with PCIe is estimated at just around 20 percent in 2016, it is going to expand rapidly next year, perhaps reaching to 30 to 40 percent,” said Chen. “The increasing number of brands offering SSDs with this interface technology, along with more affordable solutions from SSD controller chip makers, will help grow the market share of PCIe in 2017.”