Phison’s K.S. Pua: NAND Flash Will Become an Irreversible Trend; Orders Booked Through Q2 2027

According to reports from media, K.S. Pua, CEO of Phison Electronics, recently stated that the current NAND Flash market continues to face tight supply, with the shortage showing no signs of bottoming out. He expects the supply-demand imbalance in the second half of this year to be significantly worse than in the first half, and warns that the situation could become even more severe next year. Pua emphasized that the NAND Flash shortage will be a long-term and irreversible trend, noting that the company's orders are already booked through the first and second quarters of 2027.

Pua pointed out that while the industry's focus has historically been on the AI computing power race, the true bottleneck will gradually shift to storage capacity. Whether for training and inference of AI models or the preservation of massive datasets, extensive Flash storage space is essential. With the expanding global user base for AI and the expansion of application content from text alone to multimodal formats like images and videos, storage demand will grow exponentially. However, Flash production capacity cannot be rapidly expanded in a short period, making supply-demand imbalance the new long-term normal.

Facing this severe supply-demand situation, Pua revealed that although Phison has secured relatively sufficient supply channels, the growth rate of customer demand still outpaces supply growth. As a result, the company currently can only prioritize meeting the needs of its core customers. To navigate this crisis, Phison is aggressively building up its inventory. The company's inventory scale exceeded NT$70 billion in the first quarter and continues to climb. In an environment of extreme supply scarcity, the current market is not a situation where "money can buy goods"; rather, it relies entirely on the support of original manufacturers for supply. Therefore, Phison's strategy is to actively build up inventory as much as possible.

Regarding Phison's aiDAPTIV+ business, Pua noted that it is still in the Proof of Concept (POC) and market introduction phase, generating quarterly revenues of approximately NT$200 million to NT$300 million. He frankly stated that the biggest challenge in AI implementation is not hardware equipment, but the insufficiently fast development of the supporting software ecosystem. To address this, Phison is investing more resources into developing its own software platforms to accelerate the deployment of AI applications. As enterprise and education markets gradually see tangible results, this business is expected to see significant growth momentum in the third and fourth quarters of this year.

In terms of customer deployment, Pua revealed that Phison's collaborative projects with major Cloud Service Providers (CSPs) are progressing steadily, and the company has secured numerous new business opportunities. However, he also emphasized that beyond having its technology and quality recognized, securing sufficient supply resources is the decisive factor for expanding shipment volumes going forward. As these related projects gradually take effect, Phison's business performance is expected to materialize step by step in the second half of the year.