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AI Demand Drives Enterprise SSD Contract Prices Up by 25% in Q2 and Boosts Supplier Revenues by Over 50%

TheLostSwede

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TrendForce's latest reports reveal that the second quarter of 2024 saw a significant increase in demand for enterprise SSDs due to the increased deployment of NVIDIA GPU platforms and rising storage needs driven by AI applications, along with a surge in demand from server brands. The surge in demand for high-capacity SSDs for AI applications—coupled with suppliers' inability to adjust capacity in the first half of the year—resulted in a supply shortage that drove average enterprise SSD prices up by more than 25% QoQ. This price increase led to a revenue growth of over 50% for suppliers.

Looking ahead to the third quarter, demand from North American CSP customers continues to rise, and server brands show no signs of slowing down their orders, further boosting procurement volumes of enterprise SSD. With supply shortages persisting into the third quarter, TrendForce forecasts a 15% increase in contract prices compared to the previous quarter, with supplier revenues expected to grow by nearly 20%.




Samsung emerges as the biggest beneficiary of market recovery; SK hynix's shipments expected to grow in Q3
Adjustments of North American inventory concluded at the beginning of 2024 and enterprise SSD orders surged as companies actively invested in AI storage infrastructure. Samsung, maintaining a competitive edge with its comprehensive product lineup, secured its position as the market leader in Q2, with revenue rising to US$2.48 billion.

TrendForce notes that with more NVIDIA GPUs arriving in Q3, CSPs will continue to increase their enterprise SSD purchases. Moreover, as Samsung's PCIe 5.0 products progressively pass customer validation and begin ramping up in volume, the company's profitability is expected to grow, with revenues projected to increase by more than 20% QoQ.

Solidigm, a subsidiary of SK Group and the largest supplier of QLC enterprise SSDs, also benefited significantly from the surge in AI demand. Additionally, SK hynix secured more orders from server customers, boosting the group's total revenue to $1.824 billion in Q2, with a slight increase in market share to nearly 32%. With Solidigms' capacity expansion and continued momentum for high-capacity SSD orders into the second half of the year, SK hynix's shipments are expected to grow further, with revenues likely to rise accordingly.

Micron ranked third in enterprise SSD market share in Q2. The company's early mass production of high-capacity products in 2023 significantly boosted its shipment volumes in 2Q24. Combined with rising orders from server brands, Micron's revenue grew sharply to $780 million. The company is shifting its product focus to PCIe interface products as orders for high-capacity SSDs increase.

Kioxia also saw its Q2 enterprise SSD revenue rise to $490 million, driven by increasing demand from server brands. TrendForce states that the surge in AI and big data computing will continue to drive growth in enterprise SSD demand, surpassing that of consumer-grade products. Kioxia's advantage lies in its diverse product lineup, covering SATA, PCIe, and SAS interfaces, which could help it expand its market share in the future.

WDC saw a slight decline in demand from key customers in Q2, coupled with slower growth in its PCIe interface products compared to competitors, resulting in revenue of $164 million. In response, the company has shifted its focus to developing PCIe interface products and is increasing its collaboration with third-party controller manufacturers for PCIe 5.0. Additionally, WDC has introduced high-capacity QLC products.

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This AI crap need to stop and people need to come back down to earth.
 
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This AI crap need to stop and people need to come back down to earth.

They'll be some end use case to pay for the hundreds of billions of hardware build out...

Or it'll stop, eventually, because not economically viable.
 
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Where's all this AI stuff anyway? I haven't seen it anywhere except from ChatGPT and a few deepfake parody videos on YouTube.
 
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Where's all this AI stuff anyway? I haven't seen it anywhere except from ChatGPT and a few deepfake parody videos on YouTube.

For the life of me I can't remember where I heard it, but there is a company (which I never heard of, but apparently is worth billions) that's had AI since the late 90s. In the early 2000s the company stopped taking on investors and anyone that had invested with the company is worth millions and millions of dollars today. Whatever that company has had for the past 25-30 years, apparently everyone and their cousin have just been starting to get their feet wet over the past few years. If that's true, that's very interesting (but not so much that I cared to follow up and see if it was).

As for recent AI stuff that's not ChatGPT; I've heard of Claude, Meta, Gemini, Microsoft Copilot and that's all I can think of. I don't pay much attention to this crap. Right now everything that's out there is just parroting software, take in what is given to it and parrot it back in a way that mimics speech.

I'm sure there are big projects going on in other parts of the world that we don't hear much about, from places such as China, for example.
 
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Where's all this AI stuff anyway? I haven't seen it anywhere except from ChatGPT and a few deepfake parody videos on YouTube.
For end-consumers? I think you already saw Copilot, Gemini, the new AI on new smartphones, etc.
In the enterprise space every single system is reforging their AI with new models and sh1t.
That include autonomous vehicles, healthcare, all research you can think of, cybersecurity, big data analytics, data/text/voice processing... everything... The Google trackers collecting your data right now will be managed by AI.
 
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For end-consumers? I think you already saw Copilot, Gemini, the new AI on new smartphones, etc.
Oh, it's my fault then. I avoid these like the plague because the results they give are often vague, incomplete, or sometimes even utterly false.

In the enterprise space every single system is reforging their AI with new models and sh1t.
That include autonomous vehicles, healthcare, all research you can think of, cybersecurity, big data analytics, data/text/voice processing... everything... The Google trackers collecting your data right now will be managed by AI.
Fair enough, thanks. :)
 

TheLostSwede

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Where's all this AI stuff anyway? I haven't seen it anywhere except from ChatGPT and a few deepfake parody videos on YouTube.
I think you're the wrong age group, just like me, as I don't trust that crap.
However, younger people are using instead of search engines to "find" information about stuff, which is quite scary, as so much of the information is wrong and sometimes even deadly, compared to even wikipedia.
 
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