AI Inference Drives Storage Demand: QLC SSD Growth Imminent

TrendForce indicates AI-driven data explosion causes structural changes in data center storage. HDD shortage accelerates QLC SSD demand, especially high-capacity products. Despite cost considerations, the widening HDD gap prompts North American CSPs to evaluate QLC SSD as cold data storage alternative. Supplier capacity constraints and CSP price sensitivity lead to short-term price negotiations, but in the long run, unresolved HDD issues will lead to explosive growth in QLC SSD demand.

Key Highlights:

• Demand Shift: AI applications surge, leading to data explosion and significantly increasing data center storage demand, which traditional HDD supply chains struggle to meet.
• Supply Chain Bottleneck: HDD vendors' conservative capacity expansion leads to extended lead times, failing to meet cloud service providers' rapid deployment needs, widening the storage gap.
• Technology Substitution: HDD shortage promotes QLC SSD as an alternative for cold data storage, with North American data centers beginning to evaluate its feasibility.
• Cost Considerations: CSPs evaluate QLC SSD based on cost per unit storage, which must be controlled within three times that of HDD to achieve overall cost balance.
• Vendor Strategy: SSD vendors benefit from HDD order transfers but are unwilling to significantly lower prices due to limited QLC SSD capacity and high technical barriers.
• Price Negotiation: CSPs adhere to price baselines, while SSD manufacturers are unwilling to compromise, resulting in a failure to adopt QLC SSD on a large scale in the short term.
• Long-Term Trend: HDD supply issues are difficult to resolve, making it necessary for CSPs to find alternatives, and QLC SSD demand is expected to grow explosively next year.