Phison is a key player in the storage world. The company holds roughly 20% of the SSD controller market, 40% of the automotive storage market, and a slice of server SSDs, among other ventures. The unprecedented flash memory shortage is tough enough on Phison, but CEO Khein-Seng Pua (KS Pua) says that it could lead many smaller companies to a quick death this year in an interview with Ning Guan from Era News.
In the talk, he describes a meeting in China where he witnessed mobile and automotive companies (presumably major ones) pleading suppliers for flash memory. He concludes that smaller firms may not be able to secure any flash supply at all, stating that "consumer electronics are finished," and that the market "will see a lot of victims" in the second half of 2026.
Later in the interview he says that he "[tells his clients] that if the first quarter of this year is painful, really painful, then by year-end, they'll definitely jump off a building."
Even in larger markets, Pua expects that smartphones will go undergo a production cut in the range of 100 to 250 million, and that PC and TV shipments are also bound to drop due to supply constraints.
Overall, that's quite the ugly picture, but there seems to be data to support it. Pua says that one of the three major NAND foundries is actually demanding three years' worth of cash prepayments upfront, a notion heretofore unheard of in the industry yet not unbelievable in this time of dire straits. Host Ning Guan even remarks that not even TSMC asked Nvidia, of all companies, for that much of a down payment.
Should even half of the predicted scenario ring true, the consequent flash apocalypse may be as bad or worse than the DRAM crisis. Pua says that 8GB eMMC modules, used across many consumer and automotive segments, rose from $1.50 to $20 last year alone, a 13x increase. Even at those inflated prices, they're still hard to come by, even for the likes of Phison. Pua concedes he and many others are now "memory beggars" and cites that his customers' fulfillment rate is under 30%, revealing an already exhausted market.
If that wasn't enough bad news already, Pua thinks the situation will get worse still, as the demand of the AI market shifts from training (creating the models) to inference, when the models actually run to generate content. The explosion in AI usage requires storage for said content, leaving no flash chips for hardware outside of datacenters.
That news unfortunately dovetails with Western Digital saying it's out of hard drives for the year, and already short for 2027 and 2028. At this rate, we'll be back to computing on abacuses in no time flat unless there's some kind of market correction.
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