In a surprising turn of events, the NAND storage industry is witnessing an unparalleled surge in demand. A leading supplier, Phison, has described the current situation as “shocking,” following similar trends observed in the DRAM sector. The rise of artificial intelligence (AI) is significantly impacting the supply chain, driving up prices and challenging industry norms.
AI’s Impact on NAND Supply and Pricing
The AI sector has rapidly disrupted various markets, including NAND and DRAM, after initially targeting the chip industry. According to a recent earnings call by Phison’s CEO, Khein-Seng Pua, the memory cycle is experiencing unprecedented changes. The average selling prices (ASPs) for NAND TLC memory have surged by 50-75% in just a few months, indicating that products like consumer SSDs could soon become much more expensive.
This escalating demand stems from the widespread adoption of NAND technology in AI environments. Data centers now rely on NAND-based drives for model storage and low-latency startup, keeping the market tight and sustaining the price uptick.
Shifting Dynamics in the NAND Industry
For a significant period, the NAND industry faced a demand drought. However, the advent of AI inference has drastically altered this scenario, causing a massive spike in the need for NAND storage devices. Despite underutilized facilities and cautious expansion strategies, suppliers are likely to increase capacity to meet unprecedented AI-driven demand.
We believe NAND company, they’re not willing to expand the fab until now because in the last five years from COVID until now, the total profit in the NAND still even. They’re not making any good profits, but from now on they start to get profit.
– Phison CEO
Future Outlook for Consumers
As demand for NAND mirrors the earlier rise in DRAM needs, consumers can expect significant price increases for storage devices, notably SSDs with larger capacities. The upcoming retail season may provide a timely opportunity for those looking to upgrade their PC storage before prices climb further. With these shifts in the market, staying informed about storage trends is crucial for tech-savvy shoppers.