The price of any product is defined by two parameters: scarcity and utility. In the case of computer hardware, the huge demand for NVMe SSDs is gradually increasing as they become an indispensable part today. This is why Samsung is going to increase the price of its SSDs, but is this an arbitrary decision or is there something else behind it?
In the world of large foundries that create huge amounts of large-scale chips, it can be said that in terms of memory Samsung is the queen, while TSMC and Intel specialize more in logic and, therefore, in the CPU. and the GPU. The South Korean multinational is not the only manufacturer of RAM and NAND flash in a plethora of different variations, but its strength over others is undeniable.
We have proof in an NVMe SSD, where it is a vertically integrated company for them where all the components are designed and manufactured in-house. While other vendors have to purchase the various items from third parties. Under this premise, it would make sense to expect them to enter a price-wear competition, but Samsung will do the opposite.
Why is Samsung going to increase the price of its SSDs?
The reason behind this has to do with the problems they have in Xi’an which we talked about a few days ago. These chip factories have been temporarily closed by local authorities and are responsible for manufacturing 40% of the NAND Flash memory used in NVMe SSDs, which is 7% of the amount of this memory manufactured worldwide. Currently, the Xi’an plant is responsible for manufacturing the 136-layer V-NAND used in the 980 Pro, as well as the 176-layer versions that we will see in a few months with PCIe Gen 4 and Gen 5 interfaces. .
When the production line is completely stopped, a series of costs continue to operate, such as workers’ wages, the minimum cost of maintaining them, and payment for plant and machinery. Technically, it’s as if Samsung suddenly finds out that only 60% of chips are performing well instead of 100%. So, in the end, the only solution for the company is to charge these fees on the products that are launched on the market.
How much more will we have to pay?
If you are interested in a Samsung NVMe or SATA SSD and it is a must have part, then our advice is not to overthink it. Obviously, they can’t outrageously raise prices as it would be detrimental to them in terms of market share, however, it is not known at this time how much Samsung will increase the price of its SSDs.
Let’s not forget that NAND Flash memory has a large number of manufacturers, but Samsung is the one with the largest market share. Therefore, the price increase plan may have a contagion effect on the rest of the manufacturers in the industry, which may affect our pockets as users.
