The memory market crisis caused by the AI boom is affecting many related industries. Solid-state memory manufacturers have begun revising contract prices more frequently and demanding prepayment from customers for product delivery. SSD controller developer Phison has taken a similar approach.
Phison's business model involves supplying partners with ready-made "semi-finished products" for SSD production, which include not only the controllers themselves but also the necessary flash memory. However, amid a memory chip shortage, the company has found it difficult to operate under its previous terms. Therefore, as recently as last month, as reported Taiwanese mediaPhison has notified customers of the need to tighten its product payment policy.
Phison now requires either full upfront payment or expedited delivery. The company explains that this new policy will help it more efficiently procure materials needed for its own products and increase operational flexibility. The AI boom enabled Phison to nearly triple its revenue year-over-year in January, and increase by 20% sequentially, to a record $331 million.
Most NAND manufacturers, as noted by Commercial Times, now require customers to prepay for supplied memory. According to some reports, SanDisk is now offering customers who want to guarantee future memory the option of making full prepayment for a period of one or three years. SanDisk management recently confirmed that the company is transitioning to multi-year contracts with customers. Traditionally, NAND supply contracts were concluded for one quarter. Theoretically, suppliers can now sign even five-year contracts, as SanDisk's customers are currently submitting orders for 2028. The company's management expects the server segment to become the largest NAND sales market this year, with growth rates ranging from 25% to 60%.
Japanese chipmaker Kioxia's profit in the first quarter of this year is expected to increase 26-fold to $2,2 billion, according to forecasts. Orders for NAND flash memory for the server segment have already been secured not only for the entire next year but also for 2028. Kioxia plans to increase capital expenditures this year by 24% to expand production of memory, which is in demand in the AI segment. The company is also complaining about rising prices for DRAM memory purchased for its own needs. It will have to not only expand its supplier base but also pass on some of the costs to its customers.
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Source: 3dnews.ru
