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Samsung’s decision to increase SSD prices may be justified as the AI boom reaches its zenith.

The tech giant Samsung Electronics has made the decision to raise the prices of its enterprise Solid State Drives (SSDs) by 20-25% in the second quarter of 2024. Initially projected at 15%, this significant price hike is attributed to the escalating demand within the artificial intelligence industry which is experiencing an unprecedented boom.

Recent weeks have witnessed a global shortage of NAND flash enterprise SSDs, a situation which is primarily the result of the soaring demand from emerging data centers and the rapid expansion of storage servers related to AI technologies.

Influencing the market trends

With its commanding presence in the enterprise SSD market, Samsung holds a considerable influence over pricing decisions. Industry analysts at TrendForce anticipate that where Samsung leads, other market players are likely to follow suit, resulting in a uniform price hike of 20-25% across the industry.

Bryan Ao from TrendForce states, “As large-capacity SSD orders face low fulfillment rates, suppliers are dictating price movements, potentially compelling buyers to accept the increased prices. Considering buyers are looking to build up their inventories before the peak season in the second half of 2024, enterprise SSD contract prices are expected to surge by 20-25% in Q2 – marking the most substantial increase across all product lines.”

While enterprise SSDs are set for a substantial jump in prices, eMMC and consumer SSDs will see a more moderate increase of 10-15% in the second quarter.

As highlighted by The Register, the rapid growth of the SSD market is primarily fueled by the demand generated by artificial intelligence applications. The success of AI technology becomes pivotal, as any potential downturn could result in negative implications for the market. However, as long as the flow of funds into premium computer components continues, brands like Samsung can sustain their revenue growth amidst the evolving tech landscape.

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