As the artificial intelligence (AI) industry grows, demand for NAND flash is surging, and global NAND flash manufacturers such as Samsung Electronics, SK hynix, and Kioxia are accelerating capacity expansions. However, Samsung Electronics and SK hynix are prioritizing advanced investments in DRAM capacity, and Kioxia's expansion is not expected to meet demand in the short term, leading most analysts to say the upward trend in NAND prices will continue for the time being.
According to market research firm DRAMeXchange on the 17th, last month's average contract price for general-purpose NAND products (128Gb 16Gx8 MLC, for memory cards and USBs) was $17.73, up 39.95% from the previous month's $12.67. Compared with $2.18 in January last year, it is about an eightfold increase. Demand has surged rapidly, centered on AI data centers, while supply from NAND manufacturers has failed to keep up.
Along with DRAM, the shortage of NAND supply is deepening amid the AI industry's growth. As AI models are trained and inference capabilities are enhanced, demand has jumped for NAND-based enterprise SSDs (eSSDs) to store vast amounts of data. On top of that, the 4- to 6-year data center server replacement cycle has overlapped, sending demand soaring.
However, after global NAND manufacturers carried out production cuts during the past two to three years of weakness in the NAND market, it has become difficult to respond to demand. In particular, Samsung Electronics, SK hynix, and Micron prioritized DRAM production, where demand has exploded even more steeply than NAND, pushing NAND expansion down the list.
Market research firm TrendForce projected, "With increases in NAND production capacity remaining limited in the short term and AI demand surging, strong price gains will persist throughout this year."
Samsung Electronics and SK hynix plan to focus on securing space at their NAND plants in China this year. Samsung Electronics is understood to have completed process-conversion investments at its Xi'an Plant 1 and plans supplemental investments in the second half. Xi'an Plant 2 is reportedly reviewing supplemental investments equivalent to about 40,000 wafers per month. SK hynix is said to be moving forward with new investments to expand capacity at its Dalian Plant 2 by up to 50,000 wafers per month.
They are also said to be making all-out efforts to find space at new domestic production lines. At Samsung Electronics' new production base, Pyeongtaek Campus Plant 5 (P5), and SK hynix's Yongin Semiconductor Cluster Phase 1 fab (Y1), they are reportedly reviewing plans to expand NAND production lines.
An official in the semiconductor industry said, "Domestic memory semiconductor corporations are prioritizing expansion of DRAM and high bandwidth memory (HBM) capacity, but NAND demand is also surging, making a response urgent," adding, "We are working to secure space to expand production lines at plants at home and abroad."
Overseas NAND manufacturers such as Kioxia and Micron are also tightening the reins on capacity expansion. Japan's Kioxia has been carrying out expansion investments since last year and plans to secure additional capacity equivalent to about 30,000 wafers per month at its Yokkaichi fab in Japan this year. The new NAND fab in Singapore, where U.S.-based Micron has invested in equipment, is set to fully break ground this year, with mass production expected in 2028.