Hardware

Expect Shortage Of SSDs As Many Taiwanese Producers Shift Towards The Niche Markets

Since the start of 2019, the prices of 3D NAND storage technologies such as SSDs, eMMCs, and flash cards are going down. According to a report from DigiTimes, the prices of these products have gone down as low as 20% by the end of May 2019. Similarly, the overall prices of NAND products have taken a hit of 30%. The DRAM spot market also followed suit, and we witnessed a price drop of around 20-25%. It has been perfect for the consumers, but the producers are not happy with the price drops.

Many Taiwanese firms that produce these products have reported losses during the last quarter. That is why they are shifting from the mainstream consumer products to their niche pro-consumer markets. The sources have noted that due to high margins, these firms have encouraged the production of NAND products for the non-consumer market so that they could mitigate some of the losses.

Apacer Technology is one such company. It’s president CK Cheng has expressed optimism in the decision. He said that the lower NAND prices facilitate the adoption of SSDs by consumer mobile devices. He added that they are focusing on their value-added products for the non-consumer markets. These niche markets include high ASP solutions for data centers, industrial and server markets. They disclosed that Apacer would focus on these high margin products to grow their profit margins for the year.

Adata is another firm that is known for cheap SSDs. Adata Technology has announced that they are shifting from the mainstream market. They will rely on gaming, industry control, and electric motors market to increase its gross margins for the year. Simon Chen, the chairman, mentioned that 8-10% of their revenue for the year 2020 would come from the gaming products only.

Coming to the implications of these decisions. As many companies have decided to shift from producing mainstream NAND products, we can expect shortages of SSDs in the near future. This shortage can drive the prices of the products back up. The most interesting thing here would be the prices in the next quarter.


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