The race to achieve AGI (artificial general intelligence) has pushed constituents to invest in and build data centers at a pace far outstripping our ability to make them. Manufacturers are struggling to keep up with AI demand, and the ongoing DRAM shortage is proof of this, with memory kits costing more than double what they did just a few months ago. Now, DigiTimes is reporting that storage is taking a hit, too, with delivery times for enterprise-grade HDDs delayed by two years.
That means if a firm wants to buy large-capacity hard drives, the backbone of nearline storage, it has to wait 24 months due to long lead times. As the news cycle suggests, AI money doesn't wait for anyone, so hyperscalers are now switching to QLC NAND-based SSDs to avoid these backorders. Picking QLC over TLC allows them to maintain costs while achieving sufficient endurance for cold storage.
However, hoarding QLC NAND creates its own shortage, since every cloud provider in North America and China is now lining up to buy it. This could lead to SSD prices rising worldwide, as most value-oriented models use QLC to save costs. In fact, DigiTimes claims that production capacity for QLC is completely booked through 2026 at some NAND manufacturers.
Crucial P2 uses Micron-manufactured QLC NAND (Image credit: Tom's Hardware)
Therefore, given the current situation, QLC NAND is expected to overtake TLC in popularity by early 2027, marking a significant shift in the storage landscape. While enterprise-grade QLC SSDs would entirely power this pivot, Sandisk has already raised NAND prices by 50%, according to another DigiTimes report, after initially warning of a 10% increase two months ago.
This unprecedented shortage across memory and storage was largely unforeseen. Still, given the AI ambitions of the world's wealthiest, the overnight whiplash is perhaps the only surprising aspect of these price hikes. Last month, the Adata chairman hinted that the situation would only worsen over time, and it's taken just a few weeks for us to receive confirmation.
Every DRAM and NAND manufacturer is now selling capacity to AI customers willing to pay the big bucks. Instead of having 2-3 months of buffer capacity, these firms are down to just a few weeks now. This has led to year-best numbers for many businesses — a sharp turnaround from a few years ago — but, as usual, the short end of the stick trickles down to regular consumers who're now entangled in yet another electronics scarcity.
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