Build1 publisher2 min readPublished
NOR flash and SLC NAND contract prices doubled in six months as fabs chased richer wafers
The parts that hold boot code in routers, cars and factory equipment are caught in the AI memory crunch. The fabs that make them have a straightforward financial reason to keep cutting that capacity.
The Engineer · Build desk
What happened
- A June Morgan Stanley report puts memory prices up more than sixfold over the past year, breaking with decades in which memory became steadily cheaper as production increased.
- TrendForce says contract prices for NOR flash and SLC NAND each rose by more than 100% during the first half of 2026.
- TrendForce expects SLC NAND contract prices in the second half of 2026 to run a further 120% to 170% above first-half levels.
- JPMorgan expects the memory shortage to persist for at least another two years, with customers receiving only 70% to 80% of the parts they order.
Compiled by The EngineerSomething wrong?How this is made
Why it matters
- cost The increase is paid by hardware teams with no AI silicon anywhere in their products, on a line item that was small and cheap for years and was budgeted that way.
- constraint A design can pass qualification and still be short a fifth to a third of the parts needed to build it, so allocation sets the ship date.
- precedent Higher prices will not pull capacity back into a market this small, so any relief has to come from substitution or from demand falling away.
The allocation happens per wafer, and the gap is wide. Bryan Ao, a research manager at TrendForce, says a 12-inch wafer devoted to mainstream NAND can ultimately generate close to $20,000 in revenue, while the same wafer used for SLC brings in closer to $6,000 to $8,000 [3]. Divide one by the other and mainstream NAND pays 2.5 to 3.3 times more for the same silicon area [1]. Ao says Micron, Kioxia and SK Hynix have been cutting the wafer capacity they devote to SLC [4].
"What you've got going on is a purely economic phenomenon," Jim Handy, a semiconductor and SSD analyst at Objective Analysis, told Tom's Hardware Premium [7]. Of the AI chip vendors competing for the same fab capacity, including Nvidia, Broadcom and Marvell, Handy said: "They're sucking up all of the wafers" [8]. He continued: "And then the companies who make NOR flash and SLC are having a hard time getting wafers to build their product, and so they have to raise prices" [9]. He also said "The SLC NAND market is probably under a billion dollars a year" [5]. At that size, higher prices do not attract new investment [6].
Smaller SLC suppliers in China and Taiwan cannot answer the demand on their own. Ao says lead times for some semiconductor manufacturing equipment have stretched to between 12 and 15 months, and he calls the result "severe undersupply" [10][11].
The forecasts on the record are hedged. They also measure different things. JPMorgan has warned that its own forecasts do not fully capture a potential supply crunch in SLC NAND [13]. BNP Paribas forecasts an average NAND price of $279.50 per terabyte in 2026, up from $73.10 in 2025 [15], a factor of 3.8 [3]. That average is priced by the terabyte, across a product mix that TrendForce says is moving towards advanced, higher-value memory while mature processes get squeezed [20]. A boot flash is bought as a specific die under a contract. Its contract price can move independently of a per-terabyte average.
The exposure for hardware teams sits on the part that stores boot and program code, and NOR flash is a core component in automotive, industrial and networking equipment [17]. Kioxia says its serial SLC NAND is an alternative to NOR flash [19]. Taking that offer means changing the device the system reads before it can run anything, on products that were given SLC parts in the first place for reliability and endurance across long service lives [18]. It also moves the demand into SLC NAND, which is the capacity Micron, Kioxia and SK Hynix have been cutting [4].
What to watch
- Morgan Stanley has NOR flash undersupplied through 2026; an extension into 2027 forecasts would push repricing into next year's design cycles.
- Third-quarter contract data will show whether TrendForce's 120% to 170% second-half range for SLC NAND is holding.
- Whether any supplier commits to new SLC capacity, and on what equipment delivery date.