New server processors from Intel and AMD are due at the same time, which means a sales spike and accompanying price hike for enterprise SSDs.
Prices of enterprise-grade solid-state drives are likely to jump in the coming months, perhaps by as much as 15% over current SSD prices, says TrendForce, a Taiwanese market research firm that focuses on the memory market.
In a rare and no doubt unintentional move, Intel and AMD are on a path to begin shipping new processors at roughly the same time: Intel with its Ice Lake generation of Xeon processors and AMD with its Milan processors. You can expect HP Enterprise, Dell Technologies, Lenovo, Super Micro, and every other OEM to unleash a raft of servers at the same quarter as they usually do.
This will drive growth in server shipments but also drive up the share of high-density products in North American hyperscalers’ enterprise SSD purchases, according to TrendForce. The same is anticipated in China, where domestic hyperscalers Alibaba and ByteDance are expected to increase purchases as well.
Global SSD production capacity will undergo a 7% quarter-to-quarter increase, but if the predicted burst in demand happens, it won’t be enough to keep up with demand. TrendForce is predicting a 15% jump in enterprise SSD prices from the second quarter to the third quarter of this year.
TrendForce predicts demand for servers will slow down in Q4, along with demand for enterprise SSD, and the increased pricing will adjust back. But if history is any guide, server ramps are generally spread out over multiple quarters. I’m skeptical that if Intel and AMD both ship new chips in Q3, the sales bubble will burst by Q4.
Faster interfaces drive sales
Looking out into 2022, TrendForce notes Intel and AMD will kick off new processors with support for PCI Express Gen5 and the CXL (Computer Express Link) interface. These are high-speed interconnects that mean much faster data movement, and these days, with giant data sets, moving data is the bottleneck, not the processing part.
TrendForce says that NAND Flash suppliers have been fast-tracking their production of PCIe Gen5 SSDs in response to the upcoming mass production of the new processors, so these SSDs are likely to see market release between 2Q22 and 3Q22.