The storage chip market has recently gotten a bit out of control. Micron's NAND flash prices have surged nearly 50% in less than 30 days—this speed is reminiscent of those doubled or tripled altcoins during a bull market.

The shortage is no rumor. Several module manufacturers have revealed that their current inventories can only last until Q1 of next year, maybe Q2? They might really run out of stock.

Interestingly, the game theory is at play here: original manufacturers are aggressively raising prices to take the profits, while module makers are caught in the middle, stuck between a rock and a hard place. Price increases? Customers might flee. Not raising prices? If chips are still in transit and upstream suppliers add another round of price hikes, they could end up losing money. The industry’s tacit understanding has shifted—fixed prices are nearly gone, and floating prices have become mainstream—essentially sharing the risk with downstream players.

The underlying logic of this sharp price surge is clear: the effect of earlier production cuts has finally propagated to the end-users. Coupled with the insatiable demand from AI servers and new smartphones, supply gaps cannot be filled in the short term. Storage chips, which were cheap two years ago, have now become a scarce resource.

The entire supply chain has become accustomed to this new “high price + shortage” approach, and ultimately, consumers probably can’t avoid it—your next phone or computer might cost a lot more.