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AI demand isn't just affecting pricing for RAM. The CEO of Phison, a major provider of controllers for SSD drives, told investors last week to brace for price increases for NAND flash, which is used in PC storage.
“Recently all the NAND companies start to increase their selling price almost up to 50, 75%,” CEO Khein Seng Pua said in an earnings call. “So the demand is turned to very strong in Q4.”
“We believe the cloud AI, the edge AI, is going to need more storage, and hard drive displacement is happening. So NAND will be supply tight for many, many years,” he added.
Later in the call, Pua attributed the surge to the AI sector and “very strong” demand for PCs and mobile devices. “Just suddenly the AI systems need more storage for AI inference,” he noted.
Pua said it's hard to predict NAND pricing for next year. But he doesn't expect enterprise cloud service providers to reduce their demand for storage, citing the need to keep up with the AI demand. “They want to have more revenue, more income. They need to have more storage,” he said. As a result, he’s urging NAND suppliers to refrain from raising pricing too high.
(Photo by Jakub Porzycki/NurPhoto via Getty Images)“We hope, we wish, we ask, we request if the NAND company is enjoying good gross margin, 50, 60%. Good. Don’t try to go to 80%. This definitely will kill a lot of industry,” he said.
Pua also laid out a scenario where if the pricing for flash memory doubles, then hardware manufacturers in the smartphone and PC industry could cut the storage capacity in their products by as much as 50%. “For example, a smartphone using 256GB, price go 2x, they cut down to 128GB. Then the demand suddenly drop, then the price going down,” he said.
Phison’s CEO made the comment after flash memory provider SanDisk’s CEO also reported that “demand for our NAND products continued to outpace our supply, a dynamic we expect to persist through the end of calendar year 2026 and beyond.”
The good news is that pricing for consumer SSDs seems to have only slightly increased in recent weeks. For example, prices for Samsung’s NVMe storage seems to have gone up by around $10, according to PCPartPicker.com
(Credit: PCPartPicker.com)Still, PC builders should consider buying storage now, or during Black Friday sales. AI demand has also caused pricing for DDR5 and DDR4 RAM to skyrocket in recent months.
Meanwhile, Phison’s CEO says the company has already secured NAND memory units from its suppliers for next year, but isn’t sure if it’ll be enough.