Intel Partners See The Light At End Of The SSD Shortage Tunnel

After more than a year of SSD shortages and sky-high prices, Intel partners said they are finally seeing a light at the end of the tunnel.

Partners have been grappling with shortages on both the client and data center sides since October 2016 due to supply allocation and constraint issues.

"We heard from Intel that they as well as everyone else have new factories coming online so SSD production output is improving and will continue to improve," said Kent Tibbils, vice president of marketing at Fremont, Calif.-based ASI. "We've heard this before so time will tell, but I would assume if supply does in fact improve that would mean lower pricing."

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Intel had no comment on SSD supplies, but pointed CRN to a blog post published Tuesday that addressed Intel's strategy for memory in 2018.

"You can expect exciting innovation over the coming year in areas around increasing performance for Optane technology, improved NAND cell density, enhancing platform capability for storage, driving new form factors with 'the ruler,' as well as more industry collaboration for innovative solutions—all in our relentless pursuit of delighting our customers," said the post, written by Rob Crooke, senior vice president and general manager of Intel's Non-Volatile Memory Solutions Group.

The SSD shortage stemmed from a combination of fast-growing demand for SSDs as the per-Gigabyte price falls closer to that of slower-performing spinning hard disks as well as a transition by manufacturers of NAND memory, the key component in SSDs, toward 3-D NAND technology, according to multiple industry sources.

These two factors are especially impacting enterprise solution providers, who reported that the shortages are slowing down shipments of servers and storage systems.

Marc Harrison, president of Silicon East, a Marlboro, N.J.-based Intel partner, had been struggling with the shortage of Intel's popular SSD 540 client SSDs, including the 2.5-inch and M.2 models, which sent his hardware business down as much as 20 percent in the first quarter of 2017.

"In the past 10 days all of our back orders have been filled and we are now flush with drives – and the same for memory – which has been an even bigger problem," he said.

The same rings true for Gautam Shah, president of Colfax International, a Sunnyvale, Calif.-based solution provider, who said " for the most part availability of SSD drives is no longer an issue."

The fluctuation of memory supply and subsequent pricing has impacted semiconductor companies at a high level – market research company Gartner said that in 2017, the largest memory supplier, Samsung, secured the top spot in the global semiconductor market over Intel.

This was in part because memory accounted for more than two-thirds of all semiconductor revenue growth in 2017 and became the largest semiconductor category. According to Gartner, NAND flash prices increased year over year for the first time, up 17 percent, while DRAM prices rose 44 percent.

"With factory capacity being diverted to produce NAND to supply the growth in SSD, with increases in demand for memory in compute devices across the board and with the cryptocurrency markets driving up demand for graphics cards, memory supply of all types has remained tight, resulting in price increases or at the very least holding off price decreases," said Tibbils.