Phison CEO: AI Demand May Drive Storage Shortage Lasting Years
nashnova research
Phison Electronics CEO KS Pua says AI demand has opened a supply-demand gap in memory that may take years to close — fab expansion is bottlenecked by land, water, and power, and consumer electronics is bearing the brunt.
How severe is the memory shortage?
Phison Electronics (8299.TW) CEO KS Pua told a Taipei ESG forum he tells himself every day the shortage will ease tomorrow — but the reality is the gap could persist for years.
He expressed "serious doubt" that the memory market will stabilize within one to two years. AI demand — for both model training and edge deployment — keeps climbing.
This means → the shortage is structural, not cyclical. The old playbook of "wait it out" may no longer apply.
Why can't fabs expand fast enough?
TSMC is building more than 20 new fabs. Every advanced chip they produce needs multiple DRAM and NAND flash dies alongside it — the aggregate memory demand is enormous.
Yet new memory fabs worldwide are few and far between. Land, water, power, and advanced equipment are all hard constraints; build times stretch to years.
In plain terms = demand is accelerating wildly, but supply is physically bottlenecked — money alone cannot fix it.
Pua noted memory makers currently enjoy gross margins of roughly 80%, giving them every incentive to expand — but physics will slow the response.
Why is consumer electronics hit hardest?
When supply is tight, AI infrastructure buyers outbid everyone else for available memory. Consumer devices get pushed to the back of the line.
Pua disclosed that one PC OEM client expects shipments to drop another 25% in 2027. Smartphone shipment forecasts have already been cut 30–40%, with further downgrades possible.
This means → ordinary consumers may face higher prices or lower specs on phones and PCs for years — memory is being "claimed" by AI.
How does Phison itself view the squeeze?
As a module maker — a company that assembles memory chips into usable modules for downstream customers — Phison actually wants supply to loosen.
Pua put it bluntly: "Selling in volume at thin margins beats having only one chip to sell."
This reflects a mid-stream reality: module makers profit from volume, so the tighter upstream supply gets, the harder their business becomes.
Are Chinese memory makers a help or a threat?
Pua argued the rise of Chinese makers like CXMT and YMTC should not be over-politicized — the U.S. and South Korean governments similarly supported Micron, Samsung, and SK Hynix in their early years.
Chinese suppliers are already established in NAND flash; their DRAM market share is estimated at roughly 9%.
In plain terms = with supply this tight, losing that 9% would only make life harder for every system builder. Any new capacity is good news for the entire supply chain and for consumers.
When will the gap narrow?
Pua's assessment: the timeline for supply-demand balance depends on how fast new memory fabs actually come online.
That process is constrained by physics — land, water, power, equipment — not by market willingness or capital.
This means → even with money and motivation, capacity takes years to materialize. There is no clear end date for the shortage.
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