The artificial intelligence boom is fueling robust demand that is fundamentally reshaping the global storage market landscape, signaling the end of the era of cheap solid-state drives (SSD). It was confirmed on January 22 that Japanese memory chip giant Kioxia's production capacity for the entire year is already completely sold out, driven by what is described as "extremely eager" AI demand, with the tight supply situation expected to persist until 2027.

According to reports citing Shunsuke Nakato, Managing Director of Kioxia's memory business unit, the days when a 1TB SSD could be purchased for around 7,000 yen (approximately $45) are gone for good. Since late 2023 into early 2024, finding a 1TB SSD product priced below $50 has become exceptionally difficult, marking a structural shift that concludes the cycle of low-cost storage.

Shortages on the supply side have rapidly impacted end-market prices, causing a sharp, across-the-board surge in the cost of both consumer-grade and enterprise-grade storage products. Market data indicates that prices for some mainstream SSD models have skyrocketed by over 130% in the past few months. Even in the entry-level SATA SSD market, the starting price has climbed significantly to around $73, representing an increase of more than 50% from the lows seen in 2023.

Kioxia executives pointed out that faced with a backlog of orders, the company cannot simply accelerate deliveries through physical means, compelling manufacturers to adjust their allocation strategies. This observation aligns with views from other major industry players, highlighting the severe supply-demand imbalance challenging the global NAND flash supply chain as AI infrastructure construction consumes available capacity.

Market data reveals that price increases for 1TB SSDs have affected the entire spectrum of products, from traditional SATA drives to the most advanced PCIe 5.0 models. For investors and consumers who have long followed the PC hardware market, the "golden period" of 2023—when 1TB drives were available for under $50, even hitting a floor of around $35—is now a thing of the past.

Based on compiled price lists, mainstream product prices experienced significant volatility between 2025 and early 2026. For instance, the price of the Corsair MP700 Pro XT 1TB rose from $159.99 in November 2025 to $219.99 by January 2026, a 38% increase. The surges for PCIe 4.0 and PCIe 3.0 products were even more dramatic: the price of the Samsung 990 Pro 1TB increased by 83% to $199.99, while the WD SN700 1TB saw a massive 132% jump to $299.99. Even older models like the Samsung 870 Evo 1TB are now priced 51% higher than just a few months prior.

Shunsuke Nakato believes this upward price trend will continue throughout 2026 and potentially extend into 2027. This implies that the window for low-cost system builds or storage upgrades has effectively closed for users.

As a NAND manufacturer, Kioxia has not opted for a simple "highest bidder wins" strategy to manage the current shortage. Shunsuke Nakato revealed that the company is employing a "gentlemen's agreement" model for capacity allocation, based on trust and long-term cooperative relationships.

Shunsuke Nakato explained that it is physically impossible to arbitrarily speed up deliveries or ramp up production volume simply because orders are piling up. Consequently, Kioxia is not auctioning its scarce NAND resources to the highest bidder, nor is it using a first-come, first-served system. Instead, the company is choosing to negotiate annual supply plans with its long-term partners and distribute capacity accordingly. This unconventional allocation strategy aims to maintain the long-term stability of the supply chain rather than maximizing short-term profits.

In response to the ongoing supply crunch, memory manufacturers are leveraging technological solutions to enhance production efficiency. Shunsuke Nakato stated that Kioxia's Yokkaichi plant is utilizing AI and Internet of Things (IoT) technologies, collecting approximately 50 terabytes of manufacturing data daily to maximize yield rates. Meanwhile, barring any unforeseen issues, the Kitakami plant is expected to soon commence full-scale production of Kioxia's 8th-generation BiCS (BiCS8) flash memory, which could provide some relief to the global NAND supply shortage.

Nonetheless, the overall market situation remains challenging. Beyond Kioxia, other industry giants have issued similar signals. The CEO of Phison confirmed that NAND prices have doubled and that all of its 2026 production is already sold out. Furthermore, reports indicate that SanDisk has raised flash memory prices by 50% to cope with the AI-driven surge in demand. As the AI boom forces brands like Transcend to delay deliveries of their SSD and flash memory products, the seller's market characteristics of the storage industry are set to become increasingly pronounced for years to come.