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.
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.
Finis Conner highlighted the impact of the pandemic on hard drive production and sales: 'It's temporary, but the HDD surplus is still hurting sales and negatively impacting HDD stocks.'
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