Phison CEO warns NAND supply shortage will last four years, keeping SSD prices high
Despite AI-driven profits, Phison's head admits that expanding NAND production capacity will take at least four years. This bottleneck ensures high SSD prices and forces manufacturers to prioritize the AI market.
While generating mass profits from its memory controller business, Phison cannot overcome the physical limitations of current NAND production capacity. According to Club386 citing Commercial Times, CEO Pua Khein Seng has been forced to revise internal estimates: the timeline for new mass production capacity has doubled from two years to four.
The situation suggests that pressure on NAND pricing will not ease over the next few years. Without a substantial increase in manufacturing capacity, it is impossible for supply to meet market demand. Consequently, Phison is strategically managing inventory to ensure sufficient supply for the future.
This creates knock-on effects for both consumer and enterprise markets. Manufacturers like Phison continue to prioritize AI customers and products, as 38% of the company's revenue stems from this sector with no signs of slowing. It is hard to imagine any change in tune in the near future.
Phison is a large force in the world of memory controllers, but it is just one of many in the space. While that theoretically leaves room for other manufacturers to service the starving consumer market, most are dancing to the same tune. Just a few months ago, Silicon Motion declared the SSD market has "almost disappeared" with no sign of imminent reprieve.
All that said, we are seeing emerging companies like YMTC provide some relief to the NAND shortage with a specific focus on consumer markets. There are also reports that indicate NAND supply is outpacing demand, contradicting Phison and others' assessment of the market.
Even so, the problems of supply and demand affecting the SSD market will still take years to address. Treat your storage kindly for the foreseeable future, unless you fancy paying down the nose for a new drive.
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