Seagate Joins the HDD Price Hike Party, Blames AI for Spike in Demand

Seagate has joined Western Digital in increasing the prices of hard drives, with rising demand due to the huge data requirements of AI taking the blame. AI is also behind a rapid growth in orders for Enterprise solid state drives. From a report: One of the big three makers of traditional rotating hard disk drives, Seagate informed customers that it is increasing prices effective immediately for new orders, but also for any changes to orders that are “over and above” previously committed volumes. This was disclosed in a letter from the company seen by analyst Trendforce, and comes just a couple of weeks after rival manufacturer Western Digital sent out a similar letter to customers informing them of price hikes.

According to Trendforce, the cause of the issue is two-fold: rising demand for high-capacity HDD products driven by the current craze for all things AI, and reduced production by hard drive manufacturers that means they are unable to meet the demand, leading to soaring prices. The rising demand comes from AI training requiring huge volumes of data: OpenAI’s GPT-3 model is said to have been trained using 45TB of data, which may have been surpassed for newer models. And while flash-based SSDs boast high-speed and low-latency, storing everything in flash would still be costly. Seagate launched a 30TB hard drive line last year. Hard drive production was cut by as much as 20 percent over the last two years or so because of falling orders during the pandemic, and now manufacturers are unprepared for a sudden uptick in demand.

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