Phison expects SSD pricing to increase by at least 10% in the coming months due to rising demand driven by Chia cryptocurrency mining coupled with supply constraints. Furthermore, the company expects a currently short supply of SSD controllers to persist through 2022 and 2023.
Phison sells SSDs and other NAND flash-based storage devices powered by its own controllers to branded drive suppliers and PC makers. The company has a vast portfolio of products that use NAND memory from different manufacturers, so it has business relations with foundries (which produce its controllers), NAND makers, component suppliers, and OEMs. Microsoft is one of Phison’s major customers — the company uses a Phison-based SSD in its latest Xbox game consoles.
Unofficial reports say that Phison and other Taiwan-based designers of SSD controllers increased prices of their chips in the first quarter because of high demand amid production capacity constraints at foundries. Phison generated $460 million in revenue in Q1 2021 and earned $60.6 million in profits during the quarter, reports DigiTimes. The company is optimistic about its business in Q2 2021 as the demand for storage is increasing.
KS Pua, chairman of Phison, reportedly said that NAND flash makers were set to increase memory pricing again, by approximately 10% in Q3 2021, because of high demand driven by the growing PC market and the rise of Chia cryptocurrency mining. Higher flash pricing and the higher price for controllers will inevitably make SSDs more expensive in the coming months.
Unfortunately, it is hard to guess how significantly SSD prices might increase. Still, traditionally the prices of entry-level models get substantially higher as they are sold with razor-thin margins, and there is no way for suppliers to keep their prices stable, even at the cost of their own profits. Meanwhile, as Chia farmers prefer higher-end SSDs with better endurance, rapidly growing demand for such drives may also affect their prices.
SSD controller pricing will remain high in 2022 and 2023 due to constraints of production capacities at foundries, according to the chairman of Phison. Companies like TSMC, UMC, GlobalFoundries, and others are expanding their mature node production capacity to help address the shortfall, but the process will take some time.