Phison founder: Flash shortages will peak in 2027, and so will prices

According to the head of Phison Electronics, a manufacturer specializing in memory controllers, the memory crisis in the flash sector will reach its peak next year. Only later will prices stagnate at a high level.

Phison-Boss does not see demand slowing down

Phison has been active as a provider of storage controllers for more than 25 years and now offers a broad portfolio of such products, which are used, among other things, in NVMe SSDs from various manufacturers. Phison boss and founder KS Pua explained in an interview how he assesses the further development of the flash market. Pua says it expects bottlenecks in the NAND flash market to peak next year.

This will lead to a further price increase, which is likely to reach its highest level in 2027, said Pua in an interview with the US Economic Service Bloomberg as part of the Semicon Taiwan 2026 trade fair. The demand for flash-based memory will continue to be significantly higher than availability despite the planned expansion of capacities by various manufacturers.

Physics is slowing down the expansion of flash production

Although Samsung, SK Hynix and Micron are investing more and more money into expanding NAND production capacities, demand will rise significantly faster than production volumes due to the gigantic storage requirements of cloud and AI providers. The expansion of production capacities in China will also not progress quickly enough to adequately meet demand. The main problem is that there are physical limits to the speed at which capacities can be expanded. Above all, the energy supply and the space required for new plants are hindering factors.

Currently, CXMT and YMTC are rapidly increasing their volumes with the extremely rapid construction of new plants, but overcapacity is not expected in the coming years, said Pua. Although Phison itself benefits from the extremely high demand, ultimately selling more controllers, the costs for the company are rising just as they are for other providers. Overall, there is currently a “super cycle” in the NAND flash market that will probably last around ten years, Pua repeated his forecast from last year. At that time he had predicted a drastic increase in demand for flash storage, for which the Phison founder was initially partially ridiculed. However, it has now been shown that this prediction appears to be coming true.