The NAND Flash Supercycle Under the AI Wave: Soaring Prices and Structural Industry Transformation

2026-04-17

The global semiconductor industry is currently experiencing a strong recovery, and the surge in NAND flash prices is undoubtedly the core engine and strongest driving force behind this rebound. This price surge sweeping through the entire memory market—in terms of magnitude, duration, and breadth of impact—has far exceeded market expectations and is profoundly reshaping the global semiconductor landscape. According to forecasts from multiple authoritative institutions, prices of mainstream NAND products such as MLC and mature-process TLC are expected to achieve a staggering increase of over 200% from the first quarter to the fourth quarter of 2026. In the second half of the year, the supply-demand imbalance in the market may reach 40%, with the supply gap continuing to widen, acting as a powerful booster for soaring prices. In the spot market, the price of 128Gb MLC NAND flash has skyrocketed from $2.18 in January 2025 to $17.73 in March 2026, an accumulated increase of eightfold, setting a record for the most drastic price fluctuation in the history of the memory chip market.

 

Reversal of Supply-Demand Dynamics: A Rapid Shift from Oversupply to Comprehensive Shortage

The supply-demand dynamics of the NAND flash market have undergone an extreme transition from "winter" to "summer" in just one year. Before the first half of 2025, the global NAND market was still mired in oversupply, with high inventory levels and persistently low prices, leaving manufacturers generally facing losses. However, with the explosive growth of the AI industry, market sentiment took a sharp turn. The previously accumulated massive inventory was rapidly absorbed, and inventory levels plummeted to a five-year low. As of early 2026, global memory chip inventory can only sustain approximately four weeks of demand, far below the industry norm of eight to twelve weeks. End customer inventory levels are generally only six to nine months, and the market has quickly shifted from a buyer's market to a seller's market. The core trigger for this supply-demand imbalance is the strategic capacity migration of global memory giants. Facing explosive demand for HBM from AI servers, industry leaders such as Samsung and SK Hynix have decisively reallocated their capacity plans, shifting core resources, advanced processes, and substantial capital expenditures toward HBM and high-end DDR5 DRAM products, which boast gross margins of 60%-80%. Data shows that Samsung and SK Hynix have allocated 70%-80% of their advanced capacity to high-performance memory products like HBM. Specifically, Samsung plans to reduce its annual NAND flash production from 4.9 million wafers in 2025 to 4.68 million wafers in 2026; SK Hynix plans to reduce from 1.9 million to 1.7 million wafers. Both giants are simultaneously significantly cutting NAND flash wafer input volumes. Micron has followed suit, abandoning some mobile NAND development and gradually reducing production. The "abandoning low-end, pursuing high-end" strategy of the three major manufacturers has directly led to a systematic and structural contraction in the supply of general-purpose NAND flash, dramatically widening the supply gap.

 

Wafer Frame Cassette  Wafer Frame Cassette

 

Qualitative Change in AI Demand: From Cyclical Fluctuations to Structural Prosperity

The surge in NAND flash prices is by no means a simple supply-demand mismatch in the traditional memory cycle, but rather a qualitative industry shift driven by AI demand, signaling that the memory market is moving from cyclical fluctuations into a new phase of structural prosperity led by the AI technological revolution. AI's pull on NAND flash demand exhibits a magnitude and structural characteristics completely different from traditional consumer electronics:

 

Geometric Growth in Demand Intensity: A single AI server requires more than three times the NAND flash of a traditional server, and eight to ten times the DRAM. Global AI server shipments are expected to grow by over 28% in 2026, with some institutions forecasting growth as high as 180%. This "appetite for compute" directly creates a massive absorption of memory chips.

 

Deep Reconstruction of Application Scenarios: As AI shifts from model training to large-scale inference, the role of NAND flash is undergoing a fundamental transformation. In inference scenarios such as long-text generation, RAG (retrieval-augmented generation), and multimodal interaction, operations like loading terabyte-scale model files, KV cache buffering, and millisecond-level vector database queries all require NAND flash to provide high-throughput, low-latency, and highly stable storage support. It is no longer merely a passive data storage medium but has been upgraded to a critical warm-data computing layer within the AI compute architecture.

 

Comprehensive Market Structure Upgrade: AI is driving NAND demand from consumer electronics toward the enterprise eSSD market. Enterprise SSD shipments surged 86% year-on-year in 2024, and their bit demand share is projected to rise to 53% by 2028. Simultaneously, to accommodate AI's high-density storage requirements, the penetration rate of high-end NAND technologies such as QLC is rapidly increasing in the enterprise market, expected to reach 30% in 2026, further elevating the overall value and price center of NAND products.

 

Continuation of the Supercycle: Short-Term Supply-Demand Imbalance Hard to Resolve, Upward Price Trend Persists

The current NAND flash price increase is not a short-term trend but a memory supercycle expected to last two to three years. From the supply side, the capacity expansion cycle for memory chips lasts 18-24 months. Moreover, HBM has high technical barriers and slow yield improvement, with lead times for key materials reaching up to 210 days. The advanced capacity of top-tier manufacturers has already been pre-booked by AI clients through 2027 and cannot be redirected back to NAND in the short term. From the demand side, global tech giants' AI capital expenditures continue to rise, exceeding $600 billion in 2026. Iterations of multimodal large models, the proliferation of on-device AI, and data center expansion will continue to drive NAND demand growth. With multiple factors reinforcing each other, the supply-demand gap for NAND flash will persist long-term, with strong momentum for price increases. This not only directly drives profit surges for manufacturers like Samsung and SK Hynix (SK Hynix's operating profit margin reached 49% in 2025; Samsung's memory business quarterly profit increased 465% year-on-year), but also propagates throughout entire industrial chains including smartphones, PCs, data centers, and smart vehicles, triggering comprehensive price increases for memory-related products. For the semiconductor industry, the NAND flash supercycle is both a powerful engine for industry recovery and a driver for the memory industry's value revaluation—from a general-purpose component to an AI strategic resource—ushering in a new era of development.

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