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12. March 2026

Nand Flash Crisis Deepens: Prices Surge 50 Overnight

Nand Flash Crisis Deepens: Prices Surge 50 Overnight

The NAND flash industry is currently experiencing a severe shortage, with prices skyrocketing by as much as 50% overnight. According to Phison is now demanding customers pre-pay with shorter timelines — NAND squeeze affecting everyone in the SSD supply chain, this sudden increase in prices highlights the extent of the crisis facing the industry. The Taiwanese semiconductor company has been at the forefront of addressing this issue, and its strategies have shed light on the challenges faced by other manufacturers.

Phison’s decision to deliver products directly to cloud service providers (CSPs) and Micron exits consumer business as AI demand reshapes priorities has resulted in a 30% revenue share for its enterprise SSD solutions. This move is part of the company’s efforts to tap into the lucrative enterprise market, which is willing to pay premium prices for memory and storage chips. The increasing demand from AI tech firms with deep pockets has been a driving force behind this trend.

The shortage in NAND flash memory has been attributed to various factors, including the rapid growth of the data center industry. As more companies invest in cloud infrastructure and artificial intelligence, their need for high-capacity storage and memory chips has increased exponentially. This surge in demand has outpaced the supply, leading to a severe shortage that has caused prices to skyrocket.

Phison’s pivot towards the enterprise market is a strategic response to this crisis. By focusing on the needs of large-scale data centers and AI hyperscalers, the company aims to capitalize on the growing demand for high-performance storage and memory solutions. The willingness of these customers to pay premium prices has made Phison a prime beneficiary of this trend.

To address the uncertainty brought about by the price increases in both memory and storage costs, Phison has taken several measures. The company has signed long-term agreements (LTAs) with six NAND manufacturers and two DRAM suppliers across the globe. These agreements are primarily aimed at securing sufficient supply, although cost is not a primary focus for Phison at this stage.

By locking in these agreements, Phison aims to mitigate the impact of price fluctuations on its business. The company’s ability to secure priority access to resources during shortages has been a major factor in its success. In addition, Framework raises RAM prices for the third time in three months, SSD costs up — company warns that it’s running out of stock on some Intel processors as well, ensuring that it can tap into the market even when supplies are scarce.

The value of Phison’s inventory has grown significantly over the past few months, from NT$35.6 billion (around US$1.12 billion) to NT$50 billion (around US$1.57 billion). However, despite this growth, the company still faces challenges in terms of supply. CEO Pua has emphasized that “both money and inventory are insufficient” to meet the demand for Phison’s products.

Phison’s strategy to mitigate these risks is multifaceted. The company is no longer relying solely on its existing inventory to drive profit margins on its products, although this does certainly help. Instead, it is focusing on generating revenue from new agreements and partnerships with suppliers. The company’s ability to adapt to changing market conditions has been a key factor in its success.

As the demand for memory and storage chips continues to grow, Phison remains committed to developing next-generation technologies. The delivery of PCIe 6.0 samples by August 2026 is an example of this commitment. Additionally, Seagate CCO says storage price hikes are ‘the new normal’ — demand enters an unprecedented ‘supercycle’ driven by AI growth, which promises even faster speeds and higher capacities.

However, this pursuit of innovation comes with costs. Phison’s board has approved a plan to borrow $400 million to $500 million to support its research and development efforts during this time of crisis. This investment will enable the company to stay ahead of the curve in terms of technology, ensuring that it remains competitive in an increasingly complex market.

The NAND flash industry is at a crossroads, with prices at historic highs and demand continuing to grow. Phison’s response to this crisis has been exemplary, demonstrating its ability to adapt to changing market conditions and capitalize on emerging trends. As the company continues to navigate these challenges, it remains committed to innovation and growth, ensuring that it remains a leader in the industry for years to come.

Micron exits consumer business as AI demand reshapes priorities , but the industry’s focus on innovation and technology will undoubtedly shape the future of memory and storage solutions.

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