Transcend production of SSDs, SD cards hit by AI-driven NAND flash shortage, costs soar 50-100%

Transcend Faces Production Halt Amidst AI-Fueled Component Scarcity

The insatiable appetite of artificial intelligence for computing power has cast a long shadow over the component market, and storage giant Transcend is now feeling the pinch. The company has alerted its partners to impending delays in the production of its popular SSDs, SD cards, and USB drives. This disruption stems from an increasingly tight supply of NAND flash chips, the very foundation of these storage solutions.

NAND Suppliers Shift Priorities, Leaving Transcend Scrambling

The root cause of Transcend's woes lies with its primary NAND chip suppliers, SanDisk and Samsung. These titans of the memory industry have reportedly realigned their shipment schedules, effectively sidelining smaller players like Transcend. The consequences are stark: Transcend has experienced a complete halt in new NAND chip deliveries since October, and the allocation for the fourth quarter of 2025 has been drastically reduced. This isn't a minor inconvenience; it's a critical supply chain bottleneck.

The AI Effect: Data Centers Trumping Consumer Brands

In a candid communication to its clients, Transcend openly acknowledged the burgeoning deficit in both DRAM and NAND Flash memory. The situation has intensified dramatically due to an unprecedented surge in demand from colossal data centers and hyperscale operators. These entities are the driving force behind the current AI boom, and their insatiable need for processing and storage power is undeniably taking precedence. Memory manufacturers are strategically prioritizing these high-volume, high-impact clients, a reality that Transcend is now articulating to the wider market. In essence, the big players are getting their orders fulfilled first, leaving others to contend with scarcity.

Skyrocketing Costs and Extended Lead Times

The ramifications for Transcend are immediate and severe. The company has reported a staggering 50-100% increase in its procurement costs for NAND chips in just the past week. This dramatic escalation is projected to persist for at least the next three to five months. Consequently, all of Transcend's core product lines – SSDs, SD cards, and USB flash drives – are subject to production delays. Customers can anticipate not only extended waiting periods but also significant price hikes compared to previous quarters. It's a ripple effect that extends from component suppliers all the way to the end consumer.

Transcend's Tentative Response and Broader Market Impact

When approached by DigiTimes Asia for a statement, Transcend offered a somewhat reserved response. A company representative suggested that the leaked letter did not represent the official stance and might not fully capture the prevailing conditions. However, they did concede that deliveries have indeed seen a reduction in recent weeks, lending credence to the initial concerns. This situation, while impacting Transcend directly, is symptomatic of a much larger, industry-wide "resource storm" being whipped up by the relentless expansion of AI. Hard drives have already seen a roughly 20% price increase in recent months, with SSDs following suit at a 10-20% jump, all while demand for large storage capacities continues its upward trajectory. The cost of dynamic random-access memory (DRAM) has also climbed and shows no signs of abating. Looking ahead, analysts anticipate price increases for graphics cards and processors as well. Furthermore, there are whispers of potential "paper launches" for Nvidia's upcoming 5000 Super series GPUs due to anticipated shortages of GDDR7 memory. Other prominent manufacturers, including Adata, TeamGroup, and Framework, are already issuing warnings to their customers about potential component availability issues. Even Micron has taken the unusual step of pausing operations for its long-standing consumer brand, underscoring the gravity of the memory deficit.

The Memory Crunch's Devastating Reach

The pervasive shortage of memory components is having a profound and, at times, devastating impact across the tech landscape. Sales of motherboards have plummeted by a staggering 50%, and many personal computer manufacturers are reportedly delaying price increases, likely attempting to navigate the volatile market and absorb some of the escalating costs before passing them onto consumers.