Phison CEO thinks NAND shortages could shut down entire consumer electronics companies in 2026 — claims at least one foundry demands three-year cash payment upfront

Source: Tom’s Hardware

Image credit: Getty Images

Flash Memory Shortage Threatens Consumer Electronics

Phison, which holds roughly 20 % of the SSD controller market, 40 % of the automotive storage market, and a share of server SSDs, is feeling the pressure of the unprecedented flash memory shortage. In an interview with Ning Guan from Era News, CEO Khein‑Seng Pua (KS Pua) warned that the shortage could cause many smaller companies to fail as early as 2026.

Pua described a meeting in China where mobile and automotive firms were pleading with suppliers for flash memory. He concluded that smaller firms may not secure any flash supply, stating that “consumer electronics are finished,” and that the market “will see a lot of victims” in the second half of 2026.

Expected Production Cuts

• Smartphones: Potential cut of 100 – 250 million units.
• PCs and TVs: Shipments expected to drop due to supply constraints.

Unprecedented Foundry Payment Demands

One of the three major NAND foundries is reportedly demanding three years’ worth of cash as a pre‑payment upfront—a demand that has never been seen before in the industry. Host Ning Guan noted that even TSMC has not asked Nvidia for such a large down payment.

Price Surge and Fulfillment Challenges

• 8 GB eMMC modules: Prices rose from $1.50 to $20 in a single year (a 13× increase).
• Fulfillment rate: Phison’s customers are receiving less than 30 % of orders, indicating a severely exhausted market.
• Pua admitted that many companies, including Phison, have become “memory beggars.”

AI Market Impact

As AI shifts from training to inference, the demand for storage to hold generated content will increase dramatically. This further strains flash chip availability for hardware outside of data centers.

Western Digital Hard‑Drive Shortage

Western Digital has announced that it is already out of hard drives for the remainder of 2026 and anticipates shortages extending into 2027 and 2028. This adds another layer of pressure on the broader storage ecosystem.