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May 5, 2021
New Cryptocurrency Is Driving an SSD and HDD Shortage
The new currency, Chia, is advertising a more energy-efficient way to acquire coins. The main driver behind these gains in efficiency is the software, which has been fine-tuned to work with HDDs and SSDs to allow for increased security and decreased energy consumption compared to other currencies. The effect on the market and supply is an imminent shortage of NAND, SSD, and HDD to keep up with the rush to build systems to “farm” Chia. Some manufacturers are already experiencing triple-digit percentage increases in new orders.
Semiconductor Price Increases Continue to Strain Customers
Continued raw material shortages are making it extremely difficult for component manufacturers to keep up with demand. With limited wafer capping their manufacturing ability, producers are raising prices to maximize what they can deliver. Vishay, Littelfuse, ON Semiconductor, and Nexperia have indicated price increases within the next 30 days. STMicroelectronics has announced another round of price increases to be implemented around Q3. Open market pricing is also reflecting these changes as limited supply is demanding massive premiums.
AMD Is Still Not Able To Climb Out of Their Supply Constraint
As they continue to vie for priority at TSMC, orders continue to pile up, especially on server processors. With technological superiority and momentum on their side, the only thing holding AMD back from taking more market share from Intel is the ability to manufacture enough products. Right now, they are way behind and not able to keep up. Both 2nd and 3rd generation EPYC processors are extremely short in the market. Recovery is not expected until at least CYQ3, allowing Intel to release new products and regain some footing.
DRAM Module Pricing Has Leveled, While Contract Price Increases
Since the beginning of 2021, module pricing has been steadily increasing in both contract and market pricing. Depending on the density, the market pricing is over 30% higher since late December 2020. However, open market pricing has leveled off over the past three weeks, and customers claim to have a good amount of inventory despite what the memory manufacturers are reporting. Some Tier 1 customers even claim to have excess stock to deal with. Despite these factors, the memory manufacturers are still expected to implement a ~10% contract price increase. Even an increase of 10% will still keep contact below current open market pricing, which is most likely why they see the opening increase further.