Surging AI Demand Set to Leave Memory Capacity in Severe Shortage

Phison Electronics CEO K.S. Pua said AI applications are rapidly shifting from text to images as usage continues to increase, driving up token-processing volumes and data-storage needs. Memory is a critical component of AI cloud infrastructure, and whether supply can keep pace will directly affect server investment, product delivery times and the industry cycle.

Pua recently warned that AI demand would grow exponentially, while construction timelines and physical constraints on new memory plants would prevent supply from catching up over the next two years, making a severe shortage inevitable. He added that although the NOR Flash market has been weak recently, the broader memory upcycle could continue as long as AI cloud providers keep investing. Related reports did not disclose specific amounts or exact dates.