Phison CEO warns memory shortage could kill companies by 2026

Phison warns of company failures

Phison CEO Pua Khein-Seng warned that a severe memory shortage could force companies out of business by the second half of 2026. Khein-Seng confirmed these risks during a televised interview with Next TV in Taiwan. He stated that manufacturers who fail to secure enough RAM will face product cancellations or total corporate collapse.

Phison provides controller chips for SSDs and flash memory devices across the global tech industry. Khein-Seng’s position gives him a direct view of the supply chain bottlenecks currently affecting hardware production. He agreed with interviewer Ningguan Chen that the industry is entering a period of extreme instability.

The interview, conducted in Chinese, highlights a growing panic among component suppliers. Industry analysts confirmed that Khein-Seng specifically linked company survival to the ability to secure memory components. Small and mid-sized firms remain the most vulnerable to these supply chain disruptions.

AI centers consume memory supply

Artificial intelligence data centers are currently consuming the vast majority of global memory supply. This massive infrastructure buildout created an unprecedented supply-demand imbalance. Companies building AI clusters are buying HBM (High Bandwidth Memory) and standard DRAM in massive quantities.

This surge in demand caused memory prices to skyrocket over the last several months. Some specific RAM components have seen price increases of 300% to 600%. These costs make it difficult for consumer electronics companies to maintain their existing profit margins.

Even the largest tech companies are struggling to navigate these price hikes. Apple may face significant challenges securing enough RAM and SSD chips for its upcoming product cycles. The shortage affects every device that requires high-speed data processing, from smartphones to laptops.

Three companies control the market

The global DRAM market is currently an oligopoly controlled by three major entities. Samsung, SK Hynix, and Micron together control 93 percent of the entire market. This concentration of power gives these three manufacturers total control over global pricing and availability.

These manufacturers are intentionally limiting production growth to prioritize profit margins over market share. They are avoiding the risk of overproduction that led to financial losses in previous years. This strategy, often called "value over volume," keeps supply tight and prices high.

While these companies are building new fabrication plants, they are not accelerating construction. The "Big Three" have chosen to maintain high prices rather than flooding the market with cheap chips. This decision leaves hardware manufacturers with few alternatives when seeking components.

The following hardware categories face the highest risk of shortages:

• High-end gaming graphics cards using GDDR7 memory
• Next-generation gaming consoles from Sony and Nintendo
• Handheld PC gaming devices like the Steam Deck
• Enterprise-grade SSDs for cloud storage providers
• Mobile devices requiring high-capacity LPDDR5X RAM

Gaming hardware faces major delays

The memory crisis is already disrupting the roadmap for gaming hardware. Nvidia may skip shipping a new gaming GPU for the first time in 30 years. The company is reportedly prioritizing its AI-focused enterprise chips, which offer much higher profit margins than consumer cards.

Nvidia has already delayed its RTX 50-series Super refresh due to component scarcity. Internal reports suggest the RTX 60-series might miss its projected 2027 release window entirely. Gamers may have to rely on current-generation hardware for much longer than the usual two-year cycle.

Other gaming manufacturers are feeling the squeeze on their existing inventory. Valve recently announced that the Steam Deck OLED will be intermittently out of stock. These shortages stem directly from Valve’s inability to maintain a steady supply of memory modules.

The Nintendo Switch 2 and the next PlayStation release are also under threat. High component costs could force these companies to launch their consoles at much higher price points than previous generations. Alternatively, they may delay launches until the memory market stabilizes in late 2027.

Consumer habits are shifting fast

Khein-Seng expects consumers to change their buying habits as hardware prices continue to rise. He predicts that people will start fixing their products more often when they break. The era of cheap, disposable electronics may be coming to an end due to the high cost of replacement.

Repair shops may see a surge in business over the next two years. When a new laptop or smartphone costs twice as much as the previous model, consumers are more likely to pay for a screen or battery replacement. This shift could reduce electronic waste but will slow down the adoption of new technologies.

The "RAMageddon" crisis will affect consumers even if they never buy a stick of memory themselves. High memory prices drive up the cost of cloud storage subscriptions, streaming services, and web hosting. Every digital service relies on servers that are currently becoming much more expensive to build and maintain.

Phison's warning serves as a signal for the entire tech ecosystem to prepare for a lean 2026. Companies that do not have long-term supply contracts in place may find themselves priced out of the market. The second half of 2026 will likely determine which hardware brands survive the decade.