There have been many reports of increasing prices of digital storage and memory products reminiscent of onerous disk drives, HDDs, strong state drives, SSDs and reminiscence reminiscent of DRAM to fulfill the wants of AI workloads. Nevertheless, it’s possible that present demand and thus increased costs are pushed by anticipated wants and the impression of shortages in manufacturing, that are possible brief time period.
AI workloads require numerous knowledge for coaching. Extra storage capability is probably going require for inference as nicely, notably with approaches reminiscent of retrieval augmented technology, or RAG, that makes use of area particular knowledge to enhance the outcomes with an current giant language mannequin, LLM. The expansion in AI initiatives is driving up the demand for storage and reminiscence in addition to GPUs and that’s inflicting the costs of all varieties of reminiscence and storage to extend.
It is a large change from the COVID associated crash of all storage and reminiscence applied sciences in 2022 and 2023. These recovered in 2024 with the consumption of extra inventories at prospects. Consequently, many producers, reminiscent of HDD producers, mentioned that they’d be very cautious about growing their manufacturing capability.
For HDDs the historic exabytes shipments from 2001 by 2024 is proven beneath. We will see the spike in exabyte shipments in 2020 and 2021 with anticipated cloud storage demand in the course of the COVID pandemic and the huge stoop in 2022 and 2023 as extreme inventories have been consumed. 2024 noticed continued development, which is roughly consistent with the typical capability cargo development fee earlier than COVID, indicated by the dashed line.
Exabyte HDD capability cargo historical past
Coughlin Associates
If we extrapolate the anticipated development by 2030 for HDD shipments from Coughlin Associates (not too long ago up to date), we are able to see the anticipated development in storage capability shipments required to assist AI and different knowledge intensive workloads. The extrapolated storage shipments for HDDs in 2030 is about 4X increased than in 2024.
HDD capability cargo historical past and projections
Coughliin Associates
On the identical time, as a result of enhance within the anticipated storage capability per HDD by 2030 we count on that precise HDD shipments required to fulfill this projected demand will likely be about the identical in 2030 as in 2024, at about 123M HDDs shipped versus about 124M HDDs shipped in 2030 in 2024. The historic HDD unit cargo chart since 2001 is proven beneath.
Estimated HDD unit cargo by software
Coughlin Associates
It is because the projected common storage capability per shipped HDD is projected to develop from about 11TB in 2024 to about 47TB by 2030, a couple of 4.3X enhance. That is consistent with latest projections of fifty+TB nearline HDDs in manufacturing by 2027 and thus in mass cargo by 2030 and with the continued shift to producing nearline high-capacity HDD manufacturing by the business by 2030 as proven above.
The entire HDD unit shipments by the second half of 2025 have been about 59M models and we mission that complete shipments in 2025 will likely be about 120M models assuming a 3% increased cargo of high-capacity nearline HDDs within the second half of 2025, 61M models. This must be attainable with out citing extra HDD manufacturing capability, since 2024 HDD shipments have been about 124M models. There’s even the chance that complete HDD unit shipments may method the 2024 shipments, 3% increased for 2025 than our present projection. We’ll overview our projections after seeing C3Q 2025 shipments.
So, it appears that there’s sufficient nearline HDD manufacturing capability to fulfill anticipated long-term demand and thus it’s possible that latest will increase in nearline HDD costs are a mix of the longer-term contracts that the HDD firms have established with large HDD shoppers to stabilize HDD costs after the final restoration in demand in late 2023, reminiscent of hyperscale knowledge facilities along with prospects shopping for in anticipation of future wants for AI purposes and thus driving up the value of HDDs presently out there. This will create distortions within the precise demand, driving firms to buy or attempt to buy greater than their actual short-term want.
Within the reminiscence area, together with DRAM and NAND flash, there’s a long-term development of a boom-and-bust cycle on capability pricing, pushed largely by the producers constructing out manufacturing capability when costs and thus margins are good after which stopping that manufacturing construct out when all that new manufacturing comes on line and costs drop once more.
SEMI recently announced that 300mm wafer fab spending to extend by 7% in 2025 over 2024 (older knowledge reveals the retrenchment on this spending in 2022 and 2023). This announcement says that memory-related fab spending is second after the logic and micro wafer fab spending development. Particularly, the announcement says that, DRAM-related tools funding is anticipated to exceed $79 billion from 2026 to 2028, with 3D NAND funding reaching $56 billion over the identical interval. AI coaching and inference have pushed complete demand will increase throughout numerous varieties of reminiscence.
With new reminiscence fab spending beginning in 2024 it’s possible by someday in 2026 or at the least by 2027 we’ll expertise a glut of reminiscence manufacturing, even with the rising demand of AI and there will likely be vital contraction in reminiscence pricing.
In different phrases, the present development of elevated costs for HDDs and likewise for different storage and reminiscence merchandise, reminiscent of NAND flash and thus SSDs and DRAM, might be a short-term development with a attainable correction to extra historic development charges, possible by someday in 2026.
