As an unprecedented DRAM crisis unfolds, artificial intelligence is sowing chaos on another front: storage. Data centers using nearline HDDs are switching to SSDs to avoid lead times, which has led to a supply squeeze for NAND flash memory — one that's set to only worsen as the insatiable appetite for AGI continues to grow. As reported by Digitimes, Phison CEO Khein-Seng Pua confirmed that NAND prices have more than doubled in the past six months and that he expects it to stay this way for a while.
The same 1 TB TLC chip that cost $4.80 in July of this year now costs $10.70. That might not seem like a big jump in a vacuum, but the ripple effect carries huge consequences when scaled up. The end-consumer looking to build their next PC is who pays for this added cost. For enterprise customers, whom Pua says Phison is prioritizing, their backers can keep pouring in more and more money since the AI boom has created a sort of bulletproof safety net around investments.
Even older MLC memory has seen a doubling in prices, and since last month, this rapid inflation has only accelerated. Pua expects the NAND shortage to last for a few years, especially considering how bearish manufacturers have been when it comes to investing in new facilities. New production lines built to keep up with said demand won't be ready till at least late 2027, according to Phison. Elsewhere, during the company's recent earnings call, he confirmed that "every NAND manufacturer told us 2026 sold out. All the capacity sold out."
(Image credit: Getty Images)
Phison posted its year-best numbers in the third quarter of 2025, with NT$18.14 billion (560 million USD) in revenue, up 30% from the year prior. Apart from operating profits, which reduced to 7.9% due to R&D for next-gen memory, every other metric saw a jump across the board. Phison's current inventory stands at NT$1.02 trillion (31.53 billion USD), made up primarily of non-retail markets.
Phison joins SanDisk, which has already raised NAND prices by 50%. Pua said that Phison is deliberately prioritizing its server market over retail consumers due to better margins, with its enterprise SSD business growing to account for up to 30% of all sales. Supply constraints are to become the new norm, with the CEO corroborating high lead times, given the average turnover was already 224 days for Phison up till Q3 2025. Previously, another Digitimes report said that QLC NAND (serving as a replacement for HDDs) is already backordered by 2 years.
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