Industry: NAND Shortage in H2, Samsung Upgrades to 8th Gen V-NAND

As AI rapidly advances, data centers are witnessing a substantial increase in demand for high-capacity solid-state drives (SSDs). Industry experts predict a potential NAND supply shortage in the latter half of this year.

While consumer electronics sales have been slow, enterprise storage has experienced robust growth. Data centers worldwide are expanding, with typical storage capacities rising from 4TB-8TB in previous years to options of 16TB, 32TB, and even 128TB starting in 2024.

Currently, NAND wafer prices have tripled from previous lows, and NAND flash prices are expected to remain high through 2025. Key indicators show that major storage chip manufacturers—Samsung, SK Hynix, Micron, and Kioxia—anticipate a NAND supply shortfall after the third quarter. Sources indicate that these leading NAND flash manufacturers are hesitant to lower prices due to substantial demand from enterprise storage and data centers.

Additionally, major NAND producers have reduced capital expenditures over the past two years and do not plan to build new factories next year. This limitation in overall NAND supply will enable suppliers to maintain relatively high prices.

Samsung's Xi'an plant has made significant progress in transitioning to the eighth-generation V-NAND process. Samsung has begun providing samples of this new V-NAND, manufactured at the Xi'an facility, to data center customers and smartphone manufacturers for validation. It is rumored that the plant has reserved its 2025 capacity primarily for data center clients.

As Samsung advances its 3D NAND technology, nearly all major customers have transitioned to the latest process. However, Samsung has informed customers that the eighth-generation V-NAND supply will be insufficient to meet the 2025 demand.

Market research firms report that Samsung plans to increase enterprise NAND chip prices by about 10% in the third quarter, a slower pace compared to the roughly 20% increase in the second quarter. Despite this, the ongoing supply-demand imbalance will continue to provide Samsung and other chip manufacturers with leverage in future pricing negotiations.