Global enterprise solid-state drive (SSD) revenue fell by nearly half in the first quarter of 2023, according to market research firm TrendForce. The decline was driven by a number of factors, including a slowdown in server demand, high inflation, and price competition.
Server demand slowdown
The slowdown in server demand was the primary factor behind the decline in enterprise SSD revenue. The global server market is expected to grow by only 3% in 2023, compared to 10% growth in 2022. This slowdown is being driven by a number of factors, including the ongoing chip shortage, the war in Ukraine, and the rising cost of data centers.
High inflation
High inflation is also putting pressure on enterprise SSD demand. As businesses face higher costs for labor, materials, and energy, they are looking for ways to cut costs. One way to do this is to reduce spending on IT infrastructure.
Price competition
Price competition is another factor that is contributing to the decline in enterprise SSD revenue. As the market becomes more competitive, suppliers are under pressure to lower prices. This is putting downward pressure on margins and making it difficult for suppliers to generate revenue growth.
Outlook for the second quarter
TrendForce expects the global enterprise SSD market to bottom out in the second quarter of 2023. The market is expected to grow by 5% in the third quarter and 10% in the fourth quarter. However, the market is not expected to return to pre-pandemic levels of growth until 2024.
Recommendations for enterprise SSD suppliers
TrendForce recommends that enterprise SSD suppliers focus on the following areas to improve their competitive position:
- Develop innovative products that meet the needs of enterprise customers.
- Expand into new markets, such as the cloud and artificial intelligence (AI) markets.
- Invest in research and development to stay ahead of the competition.
- Improve operational efficiency to reduce costs.
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