Why is Server Memory So Expensive Now?

You may have noticed the rising prices of components on the market - we certainly have. First it was RAM creeping up and then exploding in cost, and now SSDs are heading in the same direction. The trend is clear: if it can be used as memory, it’s increasing in value, and it’s increasing quickly. But why is this happening all of a sudden and what should you do?

The Primary Cause for this Demand? AI

At the back of our minds, we all knew this would be the case. AI is powerful in its current form and its potential, but it is also an incredibly demanding technology. We have discussed the unprecedented use of energy and water and how that could have long-term effects on the planet. To provide this energy, data centres are having to scale rapidly, and that means insatiable demand for a lot of IT hardware, most notably NAND memory.

We covered this in a previous article when the main concern was around DDR4 and DDR5 RAM, but back then SSDs were not experiencing the same level of demand. The expansion of AI infrastructure is simply so great that it has caught up to SSD production, causing a sudden shortage in the market. According to Overclock 3D, there are suppliers that are already claiming that they have ‘sold out for 2026’.

Manufacturers are Focusing on the Data Centre Market

There is an inconceivable amount of money in the data centre industry and memory manufacturers are aware of this. The result? Many manufacturers have started turning their backs on the consumer market in favour of supplying the data centre industry, according to Toms Hardware. This sector has much higher profit margins and demand, meaning an increase in sales, and that can be hard to resist for component manufacturers globally.

With the combination of increasing AI demand and limited supply, hyperscalers, such as Google and Amazon Web Services, are aggressively hoarding all forms of NAND to future proof their requirements, according to Yahoo Finance. Again, this future proofing is predominantly for AI.

Scaling Back Legacy Equipment Production

The industry is on the cusp of a transitional phase with the shift from DDR4 to DDR5. As such, manufacturers are slowing down the production of legacy equipment, including DDR4 RAM components. In many cases, this would normally just mean that consumers moved to DDR5, but it’s not that simple. DDR5 cannot be straight swapped, it can often require the procurement of new server technology, and even sometimes require an entirely new infrastructure. With companies not wanting to upgrade their systems early, some businesses started to stockpile DDR4 in order to keep their existing infrastructure operational for as long as possible.

Could HDDs be Next?

Whilst many may be asking this question, the answer is already in front of us as the cost of HDD components is already following suit. SSD and RAM share NAND flash technology, so given the massive demand for RAM, it was always going to affect SSDs one way or another. Lead times are expected to be as long as two years due to how far into the future a lot of the hyperscalers and AI companies are looking. This won’t just affect SSDs; HDDs are also seeing an increase in value as buyers scramble to get their hands on anything that can keep their systems running.

Manufacturers have somewhat got their hands tied as they are physically unable to match the demand. Suppliers such as KIOXIA are predicting the current shortage to last until at least 2027, which of course further incentivises buyers to stockpile as much as possible before supply gets even lower.

Can the Issue be Bypassed?

In some capacity, yes, the issue can be bypassed, at least for the time being. Demand for new NAND storage is suffocating availability, but choosing a refurbished alternative could cut your lead time down to a day, rather than the weeks being experienced in the new market currently. For example, Techbuyer currently stocks a wide variety of high-quality NAND SSD components, ready to ship tomorrow. Demand will catch up and refurbished hardware will likely become just as difficult to grab, but for the time being at least this is a fantastic way of addressing current and future needs without higher prices and longer waiting times.

Get in touch with our team today if you’re looking for a quick solution and competitive pricing.