SSD Shortages Fueled by AI Boom Push HDD Prices to Record High

Alternative Demand Surges as SSDs Run Short

HDD Prices Jump 15% in the Third Quarter

Hard-disk drive prices, after years of losing ground to solid-state drives, have recently climbed to record highs. As production capacity is funneled into storage devices for artificial intelligence data centers, supply of general-purpose storage products has tightened.

The Nikkei reported on September 9 that bulk HDD prices for July through September reached $67.70 a unit for 3.5-inch, 1-terabyte products. That was up 15% from the previous quarter. Prices for 2.5-inch, 1TB models also rose 10% to about $61.20. Both products extended gains to a sixth straight quarter and hit record highs.

The starting point for the price increase was AI data centers. As global investment in AI drives a surge in demand for data-center SSDs, manufacturers are concentrating production on those products. Samsung Electronics and SK Hynix are also focusing on chips for data centers, reducing output of general-purpose NAND flash used in SSDs and pushing up prices. Supply of PC SSDs has fallen, and their prices have jumped 3.5-fold over the past year. That has steered demand toward relatively cheaper HDDs.

A recovery in demand from China is also lifting HDD prices. Demand for surveillance-camera applications in China rebounded in the July-to-September period. Surveillance cameras need to store large amounts of high-resolution video data, making HDDs difficult to replace with SSDs in that field.

At the same time, HDD supply has continued to decline because of worsening long-term profitability. Seagate, a major HDD manufacturer, has recently begun phasing out production of some low-capacity models.

The market is watching the ripple effects of AI infrastructure investment on existing industrial supply chains. If data centers absorb production capacity and resources first, supply of general-purpose products falls and price increases can spread to substitutes. The gains from AI growth are no longer confined to a narrow group of advanced products, with older technologies also seeing unexpected price increases. Nikkei said even products not used in AI servers are being affected by the AI investment boom.

Choi Man-su, Tokyo correspondent, Korea Economic Daily, bebop@hankyung.com