lucadelladora – AI’s growing demand is impacting the pricing of NAND flash storage, used in PCs, smartphones, and cloud systems. Phison CEO Khein Seng Pua warned investors last week that NAND flash prices are expected to rise by 50% to 75%. He attributed the surge to increased demand from cloud AI services. Edge AI, and the growing need for storage in AI systems.
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Pua explained that many NAND flash companies have raised prices in response to the strong demand for storage in AI applications. “The demand is turning very strong in Q4,” he noted. As AI systems, especially those used for inference tasks, require more storage. NAND flash supply is expected to remain tight for years to come. Pua also highlighted that the shift from traditional hard drives to solid-state storage is intensifying as companies transition to faster. More efficient storage solutions to handle AI workloads.
The impact on pricing is already being felt across the tech industry. Pua pointed out that AI’s insatiable need for storage. Combined with strong demand for PCs and mobile devices, has pushed up prices. “Just suddenly, the AI systems need more storage for AI inference,” Pua added. This sudden increase in demand has made it difficult for suppliers to keep up with the need for NAND flash memory.
Despite the rising prices, Pua urged NAND suppliers not to push prices too high. Fearing that it could harm the broader industry. “We hope, we wish, we ask, we request if the NAND companies are enjoying good gross margins, 50%, 60%. Good. Don’t try to go to 80%,” he stated. He emphasized that excessively high prices could result in reduced demand and ultimately drive prices back down. Harming both suppliers and manufacturers.
Potential Impact on Hardware Manufacturers and Consumer Pricing
Phison’s CEO also laid out a scenario where flash memory prices could rise dramatically, leading hardware manufacturers to reduce storage capacities in consumer products. For example, if the price of a 256GB smartphone storage module doubles, manufacturers could cut the storage capacity to 128GB. This would reduce consumer demand, which could then force prices back down.
This situation could have a ripple effect throughout the tech industry. The smartphone and PC markets, which are sensitive to price fluctuations, could see a decrease in the average storage capacity of their devices. In turn, this could affect consumer purchasing decisions, with buyers opting for devices with lower storage capacities or delaying upgrades altogether.
While NAND flash providers like SanDisk have acknowledged the ongoing supply-demand imbalance, they expect it to persist well into 2026. SanDisk’s CEO confirmed that demand continues to outpace supply, a trend likely to extend through the end of 2026 and beyond. The slight increase in consumer SSD prices, such as the $10 rise in Samsung’s NVMe storage prices, reflects this imbalance, but the increase has been relatively modest so far.
For consumers and businesses looking to purchase storage, the timing is crucial. Phison’s CEO confirmed that the company has secured NAND units for next year, but the long-term supply remains uncertain. With demand from AI and other sectors likely to drive prices higher, now may be the best time for consumers to buy storage, especially during major sales events like Black Friday.
