Guest commentary from Alistair Jones, Global Head of Sales at Intelligent Memory
Currently, all eyes are on the DRAM market, and understandably so. With DDR4 prices climbing week by week amid tightening supply, industry headlines are dominated by the vicious cycle of the ongoing capacity crunch and spiraling prices. But while the spotlight is fixed on DRAM, a quieter and potentially more disruptive shortage is developing in NAND flash.
Still, the warning signs are unmistakable.
What’s happening in NAND bears a striking resemblance to the situation in DRAM. NAND flash manufacturers are prioritizing high-margin segments, primarily enterprise SSDs, redirecting capacity away from traditional industrial and embedded-grade NAND products. As a result, OEMs in those sectors are beginning to face lengthening lead times and creeping price increases.
Unlike DRAM, where aggressive pricing behavior has already made the imbalance painfully visible, NAND is still operating under the radar. But don’t mistake this relative quiet for stability. Lead times have already reached 6 months in many cases — and that figure is rising.
Perhaps most concerning is that there are no significant capital investments being made to expand NAND production capacity. Manufacturers are laser-focused on profitability, not volume. The pain of the ultra-low prices in the past two years still runs deep. Manufacturers found that production expansion leads to overcapacity in ever shorter cycles, causing prices to collapse and making it virtually impossible to recoup investments. Hence, the focus of engineering efforts and investments is on 3D QLC NAND, and there is no relief on the horizon. NAND output is not going to increase in the near future — and certainly not in time to meet growing demand across industrial, automotive, and edge computing applications.
In other words, the market is entering a period of structural undersupply, and the effects will compound over time.
For OEMs and manufacturers, particularly those in industrial and embedded markets, the implications are clear: Now is the time to act.
Waiting for market conditions to stabilize or assuming that NAND will behave as it has in previous cycles is a risky bet. Instead, companies should be:
The NAND flash market is not in a temporary correction. This is a long-cycle, supply-constrained environment that demands strategic planning, not reactive procurement.
OEMs that take early, decisive action will be positioned to weather the storm. Those who delay may find themselves navigating critical shortages and cost increases in a market that shows no signs of loosening up.
In short: Don’t expect this to go away soon. Expect it to get worse. And plan accordingly!