For much of the past year, attention across the semiconductor market has centered on DRAM constraints, particularly the rapid rise of High Bandwidth Memory tied to AI infrastructure. As suppliers redirected capital and tooling toward higher-margin applications, other segments of the memory market were left increasingly constrained.
That imbalance is now surfacing in NAND flash.
As 2026 approaches, tightening NAND supply is no longer a background issue. It is beginning to influence pricing decisions, device specifications, and sourcing strategies across the industry, with the greatest impact falling on consumer electronics, OEMs, and module makers operating outside the hyperscale tier.
NAND availability is tightening as past underinvestment collides with deliberate production restraints from some of the industry’s largest suppliers.
Reporting from Chosun Biz indicates that Samsung Electronics and SK Hynix, which together control more than 60 percent of global NAND flash supply, are planning further production reductions this year. Samsung is expected to scale back output from approximately 4.9 million wafers to 4.68 million, while SK Hynix is reducing production from roughly 1.9 million wafers to 1.7 million wafers. These cuts follow similar reductions implemented last year after prolonged periods of low profitability.
The timing is critical. These production decisions are colliding with a renewed surge in storage demand driven by AI infrastructure, particularly as next-generation accelerators require significantly higher SSD capacity to support inference-heavy workloads.
As AI deployments scale, storage demand is rising in step with compute. Advanced accelerators and AI servers increasingly rely on high-capacity enterprise SSDs to support fast data access, model updates, and inference workloads.
With NAND supply tightening, pricing dynamics are beginning to resemble those seen in DRAM. Reduced output, coupled with rising demand across AI servers, PCs, and mobile devices, is expected to drive broader shortages and margin expansion across the NAND ecosystem.
Early indicators are already visible. NAND prices are projected to rise between 33% and 38% in the first quarter of 2026 alone. At the same time, annual supply growth is expected to remain around 17%, well below historical averages, as suppliers maintain a conservative production stance.
Several structural factors explain why NAND supply is tightening despite clear demand signals.
First, NAND continues to rank below DRAM in capital allocation priority. DRAM, particularly HBM, offers significantly higher margins, pulling both tooling and investment away from storage.
Second, the industry’s transition toward QLC technology, which is better suited for AI data center workloads, introduces natural production inefficiencies. Yield losses during these transitions further constrain effective output, even when wafer starts remain steady.
Finally, suppliers are using disciplined production as a strategic lever. By limiting supply during a strong demand environment, manufacturers can protect pricing power, improve margins, and counter low-cost competition from Chinese producers such as YMTC.
The result is a supply environment that is intentionally tight rather than temporarily constrained.
As higher-margin enterprise demand absorbs available NAND capacity, downstream markets are beginning to feel the pressure.
Rather than passing higher component costs directly to consumers, many OEMs are adjusting device configurations to preserve retail price points. Smartphones expected to move toward higher standard storage tiers are holding at current levels. Entry-level laptops are being re-standardized with smaller or slower SSDs, reversing years of steady capacity expansion.
This shift marks a clear departure from the long-standing trend of more storage at stable prices.
Changes in commercial terms further reinforce the imbalance. Some NAND suppliers are now requiring full cash prepayment on long-term supply agreements extending through 2027.
These terms shift financing risk away from suppliers and onto buyers, effectively requiring customers to fund future capacity upfront. Hyperscalers and Tier-1 OEMs are better positioned to absorb these requirements. Others are left competing for remaining supply with less pricing leverage and limited visibility.
The result is a two-tiered market. Access to NAND is increasingly determined by capital strength and commitment, not just demand.
With utilization near capacity and production discipline firmly in place, NAND availability is becoming a gating factor in procurement and product planning decisions.
Because new fab capacity takes 18 to 24 months to come online, meaningful relief is unlikely before late 2026 or early 2027. Until then, elevated pricing, selective allocation, and tighter contract terms are expected to remain the baseline across the NAND market.
As supply tightens, visibility matters. Our NAND catalog offers a current view of availability and pricing. See what our NAND stock looks like.
This cycle reflects delayed investment rather than short-term demand volatility. Capital reductions during the downturn limited today’s available capacity just as storage-intensive AI workloads accelerated.
They tie up buyer capital for multiple years, transfer pricing risk to customers, and reduce flexibility if demand or technology requirements change.
In many cases, changes will appear through device configurations rather than retail pricing, most notably smaller baseline storage capacities.
No. Capacity allocated to enterprise SSDs reduces availability across consumer, industrial, automotive, and IoT segments.
Normalization is unlikely before late 2026 or early 2027, given the time required for new NAND capacity to ramp.