What's Happening?
Kioxia, a Japanese memory manufacturer, has announced that its entire NAND flash production volume for 2026 is already sold out. This revelation was made by Shunsuke Nakato, the managing director of Kioxia's
memory business unit, during an interview with Digital Daily. The high demand from the artificial intelligence (AI) industry is a significant factor contributing to this situation. Companies are heavily investing in AI technologies, fearing they might fall behind, which has led to a challenging supply and demand scenario. Despite the shortage, Kioxia is maintaining its commitment to existing contracts rather than opting for a 'first-come, first-served' approach. However, even long-term customers are facing up to a 30% increase in prices year-on-year. Nakato also expressed skepticism about QLC technology, favoring eighth-generation NAND flash for its superior lifespan and performance.
Why It's Important?
The sold-out status of Kioxia's NAND flash production highlights the ongoing memory supply crisis exacerbated by the AI industry's growth. This situation underscores the increasing demand for memory components, which are crucial for AI applications. The price hikes and supply constraints could impact various sectors reliant on memory technology, including consumer electronics, data centers, and cloud computing services. Companies may face increased costs, which could be passed on to consumers, affecting pricing and availability of tech products. The situation also emphasizes the need for strategic planning and investment in production capabilities to meet future demands.
What's Next?
Kioxia plans to address the supply issue by enhancing the operational efficiency of its Yokkaichi and Kitakami factories. The Yokkaichi plant is already one of the largest flash memory production facilities globally, and a second chip fabrication plant at Kitakami is set to begin full-scale production later this year. However, these efforts are unlikely to significantly alleviate the supply constraints in the short term. Industry observers suggest that the memory supply crisis may persist through 2028 and beyond, necessitating continued investment and innovation in production technologies.
