Phison, a major SSD controller maker and drive manufacturer, is now requiring its customers to make upfront payments or accept shorter payment windows. This move comes after Phison's own NAND flash suppliers began demanding similar prepayments, a result of severe price increases and shortages in the NAND market.
The article notes that NAND flash pricing has risen dramatically, estimated at three to four times its cost in mid-2025. Other major players like SanDisk, Kioxia, and potentially Samsung are also implementing or considering stricter payment terms due to the industry-wide supply squeeze.
Phison's policy appears flexible, with terms likely evaluated on a case-by-case basis, potentially favoring larger clients. The situation is attributed to rapid market changes driven by AI infrastructure demands and broader supply chain pressures.
Main Topics: NAND flash shortage and price increases; changes in payment terms within the SSD supply chain; Phison's specific response and business impact; industry-wide trends among major memory manufacturers.
Phison is now demanding customers pre-pay with shorter timelines — NAND squeeze affecting everyone in the SSD supply chain
The squeeze on NAND suppliers has come for Phison.
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It's only been a couple weeks since Phison's CEO said that at least one NAND foundry was asking its customers for upfront cash payments. Now the squeeze on NAND suppliers has come for Phison itself.
According to a DigiTimes Asia report, the company now started asking its own customers for upfront or shorter-window payments.
In a letter sent to its customers, Phison states that "[its] key suppliers have recently adjusted their payment requirements as advance payment or shorten payment" (sic), and that the firm has been "extending financial support for [customers'] orders over the past period".
This seemingly translates to Phison having already paid some of its NAND suppliers upfront, and is now in the unenviable position of passing the pain to its clients.
Phison is mostly known as an SSD controller maker, but a core part of its business is making actual drives for enterprise and automotive customers, among others.
This move is harsh but not unexpected, given various reports illustrating the meteoric rise of NAND flash pricing over the last few months. Current pricing can be roughly estimated as somewhere between 3x and 4x what the chips were going for in Q2 2025, and there's no word on any near- or even mid-term stabilization.
The shortage has reportedly led SanDisk and Kioxia to start demanding pre-payment for long-term NAND contracts, in a similar move to DRAM makers. Samsung, the largest player in the flash world, has apparently moved to quarterly NAND pricing renegotiations, and it wouldn't be entirely surprising if the Korean mogul joined its colleagues in the move to demanding pre-payment.
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The wording on Phison's letter isn't specific about which type of clients will asked for pre-payment and which will face shorter payment windows, suggesting Phison will evaluate terms on a case-by-case basis. It's not hard to imagine that the company will prioritize allocations and perhaps extend more generous terms to larger customers, seeing as the letter mentions the usual "rapid changes from AI infrastructure".
Bruno Ferreira is a contributing writer for Tom's Hardware. He has decades of experience with PC hardware and assorted sundries, alongside a career as a developer. He's obsessed with detail and has a tendency to ramble on the topics he loves. When not doing that, he's usually playing games, or at live music shows and festivals.
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VizzieTheViz Reply
Wait what? How did you get that from this article?WrongRookie said:So I guess we should avoid buying SSDs that are having a Phison controller.
Every company that’s doing anything with memory, RAM or SSD, will have to make some hard choices these days.
I don’t see why you specifically shouldn’t buy Phison drives anymore.
If you want to make a statement by not buying something it should be: don’t use AI services.
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