By Chris Mellor November 21, 2025
The NAND industry is facing a 3-year NAND chip output shortage as new fabs will take years to build.
This was the message from Solidigm at an A3 Tech Live session in London. The company is a 100 percent owned subsidiary of SK hynix who bought it from Intel when that company exited the NAND fab and SSD business in 2020. Solidigm now has two co-CEOs; Jinsoo Kang from the SK hynix side of the business, and Xin Guo from the Intel side. Solidigm CRO Paul Palonsky, appointed in April after leaving an SVP Sales position at SK hynix, said the company was searching for a permanent CEO. Perhaps we might hear more in the next couple of quarters.
There has been a somewhat dramatic ramp in SSD demand in the last three months, according to Palonsky, who said: “Demand was grossly under-estimated.”
The trigger was the realization by hyperscalers and others that AI inferencing was slowed down when the bulk of the unstructured data needed was stored on hard disk drives. Disk I/O took too long, and, as the AI inferencing workloads grew, the disk delays dragged down GPU utilization. It happened, he said: ”Virtually overnight,” as the hyperscaler put out their GPU server data center spending plans plans and “SSD demand soared.”
He puts it like this; AI inferencing meant that data was getting warmer. The HDDs held relatively cool data, but AI inferencing needs warm data and that has to be held on SSDs, so they can feed GPUs and their high-bandwidth memory (HBM) with hot data.
Palonsky reckons enterprises will fare less well than hyperscalers concerning the SSDs they need, as the hyperscalers, with their individually much larger orders, will have longer-term supply contracts.
The NAND industry moves between gloom and glut cycles. Two years ago the NAND fabricators were losing millions of dollars a year. Now revenues are booming, because demand is up significantly but supply is not. So prices rise. The heart of a NAND fab is its cleanroom where the wafers are made, from which NAND chips are cut. A fab has its building, housing the cleanroom, in which “fantastically expensive equipment” is installed, and other facilities.
A new cleanroom costs, Palonsky said, $18 billion. There’s an initial ”$2 billion to $3 billion cost, and that’s just the building.” Deciding to spend $18 billion is a huge decision. Three of the leading. NAND chip manufacturers; Samsung, SK hynix and Micron, also make HBM, which is more profitable than NAND. There is an HBM supply shortage as well, and the three are committed to building more HBM cleanroom capacity. Only Kioxia-Sandisk, with their JV, and Solidigm are pure NAND suppliers.
If any NAND fab player decides to build a new cleanroom, it will be several years before it comes on-stream. Palonsky said: “We won’t have a substantial increase in NAND cleanroom capacity for about 3 years. It takes 1 to 2 years just for the building.”
More cleanroom capacity will be built, he said, as the industry has responded this way to substantial demand surges in the past. But: “We’ll build more fab capacity in a responsible way over time.”
With memory industry financing committed to HBM cleanroom expansion, there is less capital available for NAND fab capacity increases. As we understand it, the current 3 to 5 year, AI-caused NAND demand boom isn’t enough to trigger new NAND cleanroom construction against a background of HBM fab capacity expansion. The NAND fabbers will want to be more confident of longer-term NAND demand reliability before pushing the spend button.
New NAND fabs will have to wait. SSD capacity supply demands will be met by increasing the bit output of current fabs, utilizing current cleanroom capacity better, chip capacity increases through scaling cell density, and 3D NAND layer count growth. Palonsky reckons Solidigm has two more semiconductor node size generations with its floating gate tech, before scaling limits might be reached, so there is headroom there.
blocksandfiles.com
The NAND industry is facing a 3-year NAND chip output shortage as new fabs will take years to build.
This was the message from Solidigm at an A3 Tech Live session in London. The company is a 100 percent owned subsidiary of SK hynix who bought it from Intel when that company exited the NAND fab and SSD business in 2020. Solidigm now has two co-CEOs; Jinsoo Kang from the SK hynix side of the business, and Xin Guo from the Intel side. Solidigm CRO Paul Palonsky, appointed in April after leaving an SVP Sales position at SK hynix, said the company was searching for a permanent CEO. Perhaps we might hear more in the next couple of quarters.
There has been a somewhat dramatic ramp in SSD demand in the last three months, according to Palonsky, who said: “Demand was grossly under-estimated.”
The trigger was the realization by hyperscalers and others that AI inferencing was slowed down when the bulk of the unstructured data needed was stored on hard disk drives. Disk I/O took too long, and, as the AI inferencing workloads grew, the disk delays dragged down GPU utilization. It happened, he said: ”Virtually overnight,” as the hyperscaler put out their GPU server data center spending plans plans and “SSD demand soared.”
He puts it like this; AI inferencing meant that data was getting warmer. The HDDs held relatively cool data, but AI inferencing needs warm data and that has to be held on SSDs, so they can feed GPUs and their high-bandwidth memory (HBM) with hot data.
Palonsky reckons enterprises will fare less well than hyperscalers concerning the SSDs they need, as the hyperscalers, with their individually much larger orders, will have longer-term supply contracts.
The NAND industry moves between gloom and glut cycles. Two years ago the NAND fabricators were losing millions of dollars a year. Now revenues are booming, because demand is up significantly but supply is not. So prices rise. The heart of a NAND fab is its cleanroom where the wafers are made, from which NAND chips are cut. A fab has its building, housing the cleanroom, in which “fantastically expensive equipment” is installed, and other facilities.
A new cleanroom costs, Palonsky said, $18 billion. There’s an initial ”$2 billion to $3 billion cost, and that’s just the building.” Deciding to spend $18 billion is a huge decision. Three of the leading. NAND chip manufacturers; Samsung, SK hynix and Micron, also make HBM, which is more profitable than NAND. There is an HBM supply shortage as well, and the three are committed to building more HBM cleanroom capacity. Only Kioxia-Sandisk, with their JV, and Solidigm are pure NAND suppliers.
If any NAND fab player decides to build a new cleanroom, it will be several years before it comes on-stream. Palonsky said: “We won’t have a substantial increase in NAND cleanroom capacity for about 3 years. It takes 1 to 2 years just for the building.”
More cleanroom capacity will be built, he said, as the industry has responded this way to substantial demand surges in the past. But: “We’ll build more fab capacity in a responsible way over time.”
With memory industry financing committed to HBM cleanroom expansion, there is less capital available for NAND fab capacity increases. As we understand it, the current 3 to 5 year, AI-caused NAND demand boom isn’t enough to trigger new NAND cleanroom construction against a background of HBM fab capacity expansion. The NAND fabbers will want to be more confident of longer-term NAND demand reliability before pushing the spend button.
New NAND fabs will have to wait. SSD capacity supply demands will be met by increasing the bit output of current fabs, utilizing current cleanroom capacity better, chip capacity increases through scaling cell density, and 3D NAND layer count growth. Palonsky reckons Solidigm has two more semiconductor node size generations with its floating gate tech, before scaling limits might be reached, so there is headroom there.
Solidigm: NAND industry facing fab shortfall
The NAND industry is facing a 3-year NAND chip output shortage as new fabs will take years to build. This was the message from Solidigm at an A3 Tech Live session in London. The company is a 100 percent owned subsidiary of SK hynix who bought it from Intel when that company exited the NAND […]
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