Phison CEO Pua Khein-Seng warned on February 16, 2026, that many consumer electronics manufacturers “will go bankrupt or exit product lines by the end of 2026” due to the AI-driven memory crisis. In a Chinese-language interview, the memory specialist executive painted a grim picture: mobile phone production will be reduced by 200-250 million units, PC and TV production will drop significantly, and memory manufacturers now demand unprecedented three-year prepayment terms.
The warning comes as AI demand for DRAM and NAND flash creates extreme shortages that manufacturers internally estimate will persist until 2030—or even another decade beyond that.
Unprecedented Memory Market Conditions
| Crisis Metric | Impact |
|---|---|
| Mobile Production Cut | 200-250 million units reduction |
| Memory Shortage Duration | Until 2030 (possibly 10+ years) |
| Prepayment Terms | 3 years upfront (industry first) |
| Nvidia Rubin GPU Impact | Consumes ~20% of 2025 global NAND capacity |
| New Capacity Timeline | 2+ years from announcement to production |
| China Capacity Addition | Only 3-5% of global total initially |
According to translations of Pua Khein-Seng’s interview summarized by X user 駿HaYaO, memory manufacturers are “demanding three years’ worth of prepayment (unprecedented in the electronics industry)” as they face seller’s market conditions stronger than any previous period in electronics history.
Nvidia’s Outsized Appetite
Pua Khein-Seng highlighted Nvidia’s next-gen Rubin AI GPUs as a particular concern. “If NVIDIA’s Vera Rubin ships tens of millions of units, each requiring over 20TB of SSD, it will consume approximately 20% of last year’s global NAND production capacity (excluding subsequent data storage),” according to the interview summary.
This single product line alone threatens to absorb manufacturing capacity equivalent to hundreds of millions of consumer devices, fundamentally reshaping semiconductor allocation priorities worldwide.
Production Capacity Reality Check
While Samsung, Micron, SK Hynix, Kioxia, and Yangtze Memory have announced capacity investments, the timeline offers little near-term relief. “It takes at least 2 years from announcement to production, and the equipment is in high demand,” Pua Khein-Seng noted, with manufacturing equipment itself becoming a bottleneck.
China’s contribution remains limited—new capacity will account for only 3-5% of the global total initially, insufficient to fill the 10-20% supply gap. Additionally, China’s massive domestic demand means no outflow of cheap goods to international markets.
Consumer Device Casualties
The stark prediction targets specific device categories. From late 2026 onward, “many system vendors will go bankrupt or exit product lines due to a lack of memory,” with mobile phones, PCs, and TVs facing the deepest production cuts. Companies unable to secure memory allocation or afford inflated prices face existential threats.
One potential upside, according to 駿HaYaO’s analysis, involves sustainability: “Product lifespan is extended, and products are repaired instead of being discarded when they break.” However, this assumes reduced consumer device production translates to lower overall semiconductor manufacturing rather than simply shifting output ratios toward servers and AI GPUs.
For more semiconductor industry news and memory crisis updates, follow our coverage.
The crisis fundamentally restructures electronics manufacturing priorities, with AI infrastructure demands overriding decades-established consumer device supply chains.
