NAND Flash Prices Double Amid Surging AI Demand
NAND flash memory prices have experienced a dramatic surge, more than doubling over the past six months, according to Phison CEO Khein-Seng Pua. As a key figure in the NAND flash supply chain, Pua offers a unique perspective on the evolving market dynamics. The rapid expansion of artificial intelligence (AI) infrastructure has significantly increased demand for NAND flash, leading to widespread inventory shortages across the industry.
AI Infrastructure Drives NAND Flash Shortages
The accelerated buildout of AI data centers and related infrastructure has placed unprecedented pressure on NAND flash supplies. Pua highlighted that the price of a 1 Terabit TLC NAND chip soared from $4.80 in July 2025 to $10.70 by November 2025—an increase of over 100% in less than half a year. Other NAND types, including MLC and QLC, have also seen their spot prices more than double during this period.
These shortages are not expected to resolve quickly. Pua recently suggested that the NAND flash supply crunch could persist for up to a decade. Historically, aggressive investment in NAND manufacturing capacity has led to oversupply and subsequent price drops. However, since 2023, much of the industry’s capital has shifted toward high-bandwidth memory (HBM) for AI model training, which offers higher profit margins. This shift left NAND flash investment lagging just as demand began to rebound.
Production Constraints and Future Outlook
To address the growing demand, new NAND flash manufacturing facilities are under construction. However, Pua noted that these new production lines are not expected to become operational until 2027. This delay could extend the current supply constraints, supporting his earlier prediction of a prolonged shortage.
Phison’s financial performance reflects these market dynamics. The company reported a robust third quarter in 2025, with revenue rising approximately 30% year-over-year. October saw an even sharper increase, with revenue up about 90% compared to the previous year, largely driven by a 280% surge in SSD controller sales. In response to market conditions, Phison has strategically shifted its focus toward higher-margin enterprise and industrial customers, reducing shipments to the retail segment. The company now anticipates that enterprise SSDs will contribute 20-30% of its revenue by 2026.
To ensure a stable supply of NAND flash, Phison secured most of its 2026 allocations during a market lull in mid-2025 and entered into multi-year agreements with six suppliers through 2026. Despite these efforts, overall industry capacity remains tight, with many manufacturers already sold out well into the next year.
The ongoing NAND flash shortage underscores the critical role of memory technology in supporting the rapid growth of AI infrastructure. As demand continues to outpace supply, industry participants are closely monitoring production timelines and market developments to navigate this challenging landscape.
