As the artificial intelligence (AI) industry grows, demand for NAND flash is surging, and global NAND flash makers such as Samsung Electronics, SK hynix, and Kioxia are accelerating capacity expansions. However, Samsung Electronics and SK hynix are prioritizing capacity increases in DRAM, and Kioxia's expansion is not expected to meet demand in the short term, leading most analysts to conclude that 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 standard 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. While demand has risen rapidly, centered on AI data centers, NAND makers' supply has not kept up.
Along with DRAM, the shortage of NAND supply is worsening as the AI industry grows. In the process of training AI models and advancing inference capabilities, demand has surged for NAND-based enterprise SSDs (eSSDs) to store massive amounts of data. On top of that, the 4- to 6-year data center server replacement cycle has overlapped, causing demand to spike.
However, after two to three years of a sluggish NAND market, global NAND makers implemented production cuts, making it difficult to respond to demand. In particular, Samsung Electronics, SK hynix, and Micron have focused on DRAM production, where demand has exploded more steeply than for NAND, pushing NAND expansions down the priority list.
Market research firm TrendForce predicted, "With NAND capacity increases 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 this year on securing space at their NAND plants in China. Samsung Electronics is understood to have completed process conversion investment at Xi'an Plant 1 and plans to increase output in the second half of the year. Xi'an Plant 2 is reportedly reviewing expanding capacity by about 40,000 wafers per month. SK hynix is said to be proceeding with new investment to expand capacity at its Dalian Plant 2 by up to 50,000 wafers per month.
They are also said to be making an all-out effort 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 ways to expand NAND production lines.
A semiconductor industry official said, "Domestic memory semiconductor corporations are prioritizing expanding 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 makers such as Kioxia and Micron are also tightening their efforts to expand capacity. Japan's Kioxia has been executing expansion investments since last year and plans to secure additional capacity of about 30,000 wafers per month at its Yokkaichi fab this year. The new NAND fab in Singapore, where U.S.-based Micron has invested in equipment, is expected to fully break ground this year and begin mass production in 2028.