Phison's model, with NAND market supply, has now shifted to securing capital upfront from customers as the company navigates a seller's market.
NAND Prices Have Climbed a Whopping 500% In Last Year Alone, Driven By AI-Demand
The NAND industry is also experiencing a significant imbalance in supply lines, as the role of storage in AI inference has increased dramatically over the past few months. We have already seen NAND spot prices climb significantly over the past few quarters, and for suppliers like Phison, the situation has started to bite into their profit margins. According to a DigiTimes report, Phison is now switching to a 'prepayment' model for NAND, meaning customers will need to provide capital upfront to secure supply.
The company said rising NAND prices have sharply increased its funding requirements. To secure a more stable supply, it will discuss prepayment arrangements with customers on a case-by-case basis.
- DigiTimes
The report states that NAND prices have increased by more than 500% in the last year alone, and based on what we have witnessed in NAND demand, the figure will continue to rise. One of the more important factors behind Phison switching to a 'prepayment' model is the expectation that the role of NAND chips in AI will grow signifcantly moving ahead, given that, with NVIDIA's Vera Rubin, storage is a massive problem being addressed. Back at CES 2026, NVIDIA unveiled its Inference Memory Context Storage (ICMS) platform, targeted for KV Cache offloading and focused on NAND-based storage.
Vera Rubin's projected rack shipment figures alone could gobble up more than 10% of the total NAND supply, suggesting that suppliers like Phison are already positioning themselves to capitalize on the upcoming demand. Since AI customers' influence on NAND supply is expected to increase in the year ahead, the consumer sector could suffer once again, as we saw in the DRAM industry. SSD prices continue to climb aggressively, but by the looks of it, NAND shortages have a long way to go.
About the author: Muhammad Zuhair is a hardware and technology reporter for Wccftech, specializing in the semiconductor industry and the complex interplay between technology, manufacturing, and geopolitics. His coverage focuses on the corporate strategies and technological roadmaps of industry giants like TSMC, NVIDIA, Samsung, and Intel. Zuhair's expertise lies in deconstructing complex topics such as fabrication nodes (e.g., 2nm process), the economic impact of policies like the CHIPS Act, and the strategic development of AI infrastructure from NVIDIA, AMD and Intel.
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