Memory and SSD price rises could continue to mid-2018
Low supply and increasing demand from handset makers is causing a server RAM price hike
The shortage of memory (RAM) and SSDs affecting the hardware market is impacting the revenue, cash flows and profitability of solution providers, according to a report on CRN.
Vendors 'across the board' are raising prices between 5 and 10 per cent due to the component shortages, which is having a dramatic impact on solution providers - whose customers often deploy technology on strict schedules.
Stephen Monteros, senior vice president at American provider Sigmanet, said, "It's bad news... Customers have timed their deployments on very tight windows, and [shortages] combined with price increases means double trouble for all of us."
Other providers are seeking alternative vendors, due to their commitments to clients. Dell EMC is one vendor whose supply chain delays were highlighted, causing customers to look elsewhere. Tom Sweet, CFO of Dell EMC, recently told analysts that he expects the shortages to continue until the end of the year. He said that memory prices have "doubled" since late 2016, and SSD prices are up 20 per cent.
HPE, like Dell EMC, has said that it expects the shortages to continue until the end of 2017, while Dan Serpico of FusionStorm has heard that they may even continue until mid-2018.
Despite the shortages and price increases, flash memory is still commonly thought to make economic sense as an investment. Going all-flash still has a lower total cost of ownership (TCO) than disk-based (HDD) storage.
Server and desktop RAM prices have been increasing since mid-2016, due to low supply; this is because producing RAM for mobile devices is a more profitable proposition for manufacturers. Likewise, SSD demand has risen as price-per-gigabyte has fallen, while supply has not increased at the same rate.
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