Enterprise SSD and other storage device demand is expected to pick up as early as the second quarter of 2023, according to industry sources.
The enterprise SSD market will also outpace the consumer SSD segment in size next year, driven by robust data center demand, the sources indicated.
Enterprise SSD prices have fallen rapidly since the second half of 2022, as inventories held by server OEMs swell on enterprises turning cautious about infrastructure equipment spending, the sources said. Oversupply has also prompted vendors to keenly strike long-term contracts with server clients, resulting in an over 20% enterprise SSD price fall so far in the fourth quarter, the sources noted.
With companies relying more on cloud services, demand for storage devices from data centers is expected to pick up. Server demand from data center companies remains healthy thanks to strong demand for cloud video conferences and other cloud-based services, the sources said.
North America-based cloud service companies including Amazon AWS, Google, Meta and Microsoft will see their combined server purchases increase by nearly 9% in 2023, when the overall server shipments worldwide are forecast to grow 4.3% on year, according to DIGITIMES Research.
As for PC and consumer storage demand, recovery is unlikely to take place until the second half of 2023, according to industry sources.
Micron Technology president and CEO Sanjay Mehrotra said during the company's recent earnings conference call that DDR5 will be "extremely important" for data center customers as the industry begins its transition to this new technology in the first quarter of 2023. "As modern servers pack more processing cores into CPUs, the memory bandwidth per CPU core has been decreasing," Mehrotra indicated.
However, Micron expects cloud demand for memory in 2023 to "grow well below the historical trend," due to inventory correction at key customers. "End demand at cloud customers is not immune to macroeconomic challenges but should strengthen once the economic environment improves," according to Mehrotra.
Micron recently disclosed plans to cut its workforce by 10% in 2023 after reporting losses for its most recent fiscal quarter.
Article translated by Jessie Shen
