'The retail market is almost dead': the alarm coming from the SSD industry

The expansion of infrastructures dedicated to artificial intelligence continues to produce effects across the entire memory supply chain. After months characterized by price increases for SSDs and DRAM modules, indications have now emerged suggesting a structural change in the consumer storage market.

During an interview with Tom's Hardware USA at Computex 2026, Nelson Duann, vice president of Silicon Motion, one of the world's largest manufacturers of SSD controllers, stated that the retail market for solid-state drives has now become "almost disappeared." This assessment highlights the impact of reallocating NAND memory supplies towards the AI datacenter segment.

According to Duann, PC manufacturers can no longer obtain sufficient quantities of NAND directly from the major memory producers. Companies in the sector have indeed allocated an increasing share of production to datacenter products, reducing availability for the traditional client market.

This situation has forced numerous OEMs, including major PC builders, to modify their sourcing strategies. In the past, companies like Dell, HP, Acer, or ASUS purchased finished SSDs or NAND memory directly from chip manufacturers, while today they are increasingly dependent on so-called "module makers," companies that assemble complete SSDs intended for both consumer and professional markets.

For Silicon Motion, the phenomenon is particularly evident. The controllers sold to SSD manufacturers continue to register sustained demand, but their final destination has changed radically. An increasing share of the units made by partners is now being absorbed by PC manufacturers rather than reaching the retail market. This change began in the second half of 2025 and solidified throughout 2026.

The consequences for consumers are already visible, with a significant rise in SSD prices in recent quarters, leading to a slowdown in retail sales. At the same time, the DRAM memory market continues to be affected by the same supply and demand dynamics.

However, for some companies, the situation represents an opportunity. Controller manufacturers like Silicon Motion and Phison can benefit from the increasing demand for storage units for servers and AI infrastructures, a segment that continues to expand rapidly. Hence, the overall demand for SSDs is not decreasing in terms of volumes but is simply shifting towards different applications.

The result is an increasingly influenced market by the needs of artificial intelligence, capable of absorbing productive resources and investments along the entire value chain. In the absence of a significant increase in NAND production capacity, end users will have to continue to deal with high prices and more limited availability of retail SSDs even in the coming months.