SD Card Prices Rise: What's the Connection to AI?

The rising cost of SD cards, even those with seemingly standard specifications, is a complex issue driven significantly by the burgeoning demand for Artificial Intelligence (AI) infrastructure. While inflation and currency fluctuations might seem like obvious culprits, the underlying cause is a surge in the need for high-speed data storage.

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AI models are trained using billions or even trillions of data that must be stored, read, and processed quickly. This creates a surge in demand for high-speed storage media, especially NAND Flash-based solid-state drives.

Modern AI models are trained on trillions of data points, necessitating enormous computational power and, crucially, rapid data storage and retrieval. This has created a substantial spike in demand for high-speed storage media, particularly NAND Flash-based solid-state drives (SSDs). McKinsey projects that generative AI will be a primary driver of SSD demand through the end of this decade.

The connection to everyday devices like SD cards lies in their shared reliance on NAND Flash memory technology. Although SSDs for data centers and SD cards for cameras or phones differ in form factor, their core semiconductor components originate from the same industry. As tech companies race to build AI data centers, the demand for NAND Flash has intensified.

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McKinsey projects that the use of generative AI will be the main driver of SSD demand until the end of this decade.

Memory manufacturers are consequently prioritizing more profitable product lines, such as enterprise SSDs for AI servers. This strategic shift leads to a relative decrease in production capacity for consumer-grade products, including SD cards. TrendForce reports that this increased AI storage demand has not only driven up NAND Flash prices but also altered supplier priorities towards the more lucrative server market. This shift impacts consumers, making prices for SSDs, memory cards, and other storage devices more sensitive to global memory market dynamics. Analysts anticipate this pressure on memory supply to continue for several years as AI data center construction accelerates, while semiconductor manufacturing capacity cannot be expanded instantaneously. However, AI is not the sole factor influencing SD card prices; currency fluctuations, manufacturer strategies, and global supply chain conditions also play significant roles.

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The increased demand for AI storage has driven up NAND Flash prices and shifted supplier priorities to the more profitable server market.