TECH NEWS – Prices for new SSDs and memory could soon skyrocket.
The current low prices will not last long, as manufacturing costs are not that low. For this reason, manufacturers (e.g., Samsung, SK Hynix, and Micron) will be forced to lower sales at higher prices to compensate for lost revenue until the situation improves. SK Hynix and Micron have already reportedly cut production in the last few quarters. Citigroup reports that Samsung is preparing to make a similar move: “The price decline of NAND flash memory chips is expected to narrow due to supply cuts by major manufacturers such as Micron and Kioxia, and market demand is likely to bottom out in the first quarter of 2023.”
According to sources familiar with the storage market, Samsung could lose about a trillion dollars on its first-quarter chip sales, which could double in the next quarter. If the company doesn’t take drastic action on pricing (it would have to cut below retail manufacturer prices), it could lose its place in the industry for good. TrendForce expects a loss of 10-15% for the first quarter of this year on NAND flash memory and expects SSD pricing to be loss-making.
Micron CEO Sanjay Mehrotra recently met with US President Joe Biden to discuss the chip shortage. Mehrotra raised the possibility of relying on a partnership with the private sector to help the US improve its chip market. He added that the company would invest $150 billion over the next decade to boost R&D, memory, and SSD production. Partnerships with the private sector would involve Asian countries. One of them would be China, but they are cut off from resources due to their conflicts and attribute their continued difficulties to this. The lack of prospects for improvement could mean riskier business practices to offset losses.
In short: we will have to pay with a kidney to upgrade our PCs (hint: we won’t).