Japanese memory maker Kioxia has announced that its manufacturing capacity is fully booked until the end of 2026, due to surging demand from AI investments. This shortage is expected to keep SSD prices high for both enterprise and consumer markets. Executives warn that companies cannot afford to halt AI spending amid competitive pressures.
The AI boom has created a severe crunch in the memory chip market, leading to record profits for manufacturers but prolonged shortages for consumers. Kioxia, a Japanese company spun off from Toshiba in the late 2010s, revealed that its production capacity is sold out through the remainder of 2026. This situation is driving the SSD market into what Shunsuke Nakato, managing director of Kioxia's memory division, describes as a "high-end and expensive phase."
Nakato highlighted the intense pressure on businesses: "There is a sense of crisis that companies will be eliminated the moment they stop investing in AI, so they have no choice but to continue investing," he told Digital Daily, a Korean publication. Without a significant drop in demand for generative AI data centers, this investment cycle is likely to sustain elevated prices.
To address the shortage, Kioxia is expanding operations. The company is improving yields at its Yokkaichi factory and anticipates full-scale mass production starting this year at its Kitakami facility. However, building new capacity takes years, as seen in previous chip shortages this decade. Manufacturers remain cautious about overexpansion to avoid surplus inventory if market conditions shift.
Retail trends show sharper price hikes for higher-capacity drives, with 2TB and 4TB SSDs experiencing more extreme increases per gigabyte than 1TB models. For PC users facing storage constraints from large game files, adding secondary M.2 drives is a practical option, though speeds may vary by slot. External storage or SD cards are less ideal alternatives.
This outlook aligns with predictions that the era of affordable 1TB SSDs has ended, urging buyers to purchase soon to avoid further rises.
