TAIPEI (Taiwan News) — A global memory chip shortage is set to persist for years as surging AI demand drives unprecedented storage needs, Phison Electronics CEO and founder K.S. Pua said, Nikkei Asia reported Thursday.
Pua said rapid expansion of AI infrastructure in the US has already triggered a significant memory shortage. Phison, a Taiwan-based NAND flash controller developer backed by Japan’s Kioxia, is positioning itself to capitalize on the tight market.
“Currently, it’s mainly that the US is ramping up AI computing infrastructure,” he said, noting that China might do the same.
Pua downplayed concerns that aggressive capacity expansion could lead to oversupply, saying strong demand from cloud service providers will continue to absorb output. “All these cloud providers are offering AI inference services… once you have data, you need storage,” he said.
Pua said demand for memory is closely tied to cloud revenues, as storage capacity underpins AI services. He added that the industry is unlikely to face oversupply issues “for several years.”
Pua said supply shortages are reshaping industry dynamics, forcing customers to look beyond traditional suppliers. “During such an unprecedented shortage, relationships alone are not enough. You have to demonstrate real value,” he said.
He added that some memory chipmakers are directing clients to Phison as they struggle to meet demand internally.
Despite strong demand, Pua warned that sharply rising memory prices could pose risks. He said gross margins for top memory makers have already reached around 80% and could climb higher, potentially distorting the market.
Industry data show NAND flash prices rose about 150% year-on-year in the first quarter and could increase further this year, per Nikkei Asia. Pua cautioned that excessive price gains may not be sustainable in the long term.
He noted that supply chain constraints extend beyond NAND flash, with DRAM also critical to shipping storage products. “Without DRAM, solid-state storage products cannot be shipped,” he said.
Looking ahead, Pua expects the broader consumer electronics market to recover after a period of suppressed demand. He said pent-up demand could drive a rebound within two years as supply conditions improve and new capacity comes online.
