Painfully high graphics card pricing has become a seemingly permanent norm and at least some of that comes down to the impact of the burgeoning AI boom. Are SSD and system memory prices poised to go the same way?
According to analysis by Tom's Hardware, the unfortunate answer is yes. Tom's claims that, "nearly every analyst firm and memory maker is now warning of looming NAND and DRAM shortages that will send SSD and memory prices skyrocketing over the coming months and years, with some even predicting a shortage that will last a decade."
The reason, inevitably, is explosive demand for AI hardware. Tom's notes that there's some of the usual cyclical variation going on here. Following a downturn in demand in 2022 and 2023 that saw DRAM and NAND memory manufacturers selling chips below cost, manufacturing volumes were scaled back, which eventually fed through into higher prices.
But more recently, the insatiable demands of AI for training and inference is requiring vast amounts of storage and memory. One AI outfit alone, OpenAI, has signed a deal with Samsung and SK Hynix for fully 900,000 DRAM wafers per month, which could account for 40% of current global DRAM output.
Meanwhile, Samsung's next-gen V9 3D NAND memory is said to be nearly booked out before it's even hit full release and Micron's High Bandwidth Memory production is nearly sold out through the end of 2026.
It all adds up to a "supercycle" of storage and memory demand that Phison CEO Pua Khein-Seng thinks will translate into tight supply, "for the next 10 years." Needless to say, if all this is true, it's going to be a bummer for PC gamers.
We're already having to soak up much higher GPU prices thanks to the insatiable demands of AI. Now, SSD and RAM prices could be next.
Of course, none of this is a completely done deal. At the same time as all of these predictions are bing made, there are plenty of other observers betting on an AI crash. The investor community is increasingly concerned about a possible "trillion dollar" AI bubble that's ready to burst, while Warren Buffett increasingly cashing out is giving the market jitters.
None of this may come to pass, then, but if the alternative to expensive PC components is a stock market meltdown, that's hardly a great alternative. In the end, we'll have to wait and see how it unfolds. In the meantime and all things currently considered, now might be a good moment to grab a decent deal on all kinds of PC kit, especially with the Amazon Prime day madness about to kick off.
