NAND flash pricing has surged, reaching nearly a 500% increase over the past six months, and Phison has responded by requiring some customers to make prepayments to control supply. Customers that have not yet started a Phison order are being told they must send funds as a form of credit to purchase a set amount of Phison controllers, SSDs, or other storage products. In a notice to customers, Phison said the rapid increase in NAND flash demand has pushed multiple parts of the storage supply chain to adopt alternative payment methods with a focus on quicker settlements, which means customers must either accept faster contract settlements or use other payment mechanisms such as prepayment credits.
Phison’s core business is in SSD controllers, which are manufactured as logic devices at foundries such as TSMC and Samsung rather than as NAND flash memory. The company’s latest E28 controller is produced on TSMC’s 6 nm node, which is described as a mature class of semiconductor nodes, suggesting that Phison’s own controller supply chain remains largely stable. The pressure for accelerated payments therefore appears to be tied more directly to NAND flash procurement than to controller production capacity.
Phison’s role in the broader storage ecosystem may include arranging NAND flash purchases on behalf of its customers, which would help explain why it is pushing for faster financial settlements. Specific arrangements are expected to differ by customer and are likely subject to confirmation on a case-by-case basis. In scenarios where Phison supplies SSD makers with blueprints and also manages segments of design and supply chain logistics internally, Phison would need to secure fast contract settlements so that SSD makers can obtain the most favorable NAND flash pricing to pair with Phison controllers. This integrated approach makes the prepayment and rapid settlement requirements a mechanism for navigating extreme price volatility in the NAND market.
