Surge in AI Demand Drives Enterprise SSD Market Growth

Introduction

TrendForce’s latest report on enterprise SSDs reveals a significant increase in demand driven by advancements in artificial intelligence (AI). Over the past two quarters, AI server customers have ramped up their orders for enterprise SSDs, leading to notable changes in the market dynamics.

Rising Demand for AI Applications

The surge in AI demand has prompted upstream suppliers to accelerate their process upgrades to meet the increased need for enterprise SSDs. Suppliers are not only focusing on current requirements but are also planning for the 2YY products, which are expected to enter mass production in 2025. This proactive approach aims to ensure a stable supply of SSDs for future AI applications.

Impact on Contract Prices

TrendForce’s observations highlight a significant impact on contract prices for enterprise SSDs. Increased orders from AI server customers have resulted in contract prices rising by over 80% from Q4 2023 to Q3 2024. This sharp price increase reflects the high demand and the pivotal role SSDs play in AI development.

The Role of SSDs in AI Development

SSDs are essential in AI model training as they primarily store model parameters. These parameters include evolving weights and deviations that are crucial for the continuous improvement and accuracy of AI models. The capacity and performance of SSDs directly influence the efficiency of AI training processes.

Conclusion

TrendForce’s report provides valuable insights into the current and future states of the enterprise SSD market, particularly in relation to AI. The surge in orders and the corresponding rise in contract prices highlight the growing importance of SSDs in AI server applications. As suppliers ramp up their efforts to meet this demand, the market is poised for further growth, driven by advancements in AI technology.