Phison is requiring prepayments from some customers as NAND Flash prices have surged nearly 500% over six months. The SSD controller maker has begun asking clients to send funds upfront as credit to secure controllers, SSDs, and other storage products. This move comes as AI infrastructure demand has dramatically increased NAND Flash requirements across the supply chain.

According to internal notices, Phison's suppliers have adjusted payment terms to require advance payments or shortened settlement periods. The company has been extending financial support to customers but now needs to align with these new supplier conditions. Customers must either accept faster contract settlements or provide prepayment credits to maintain their orders.

Phison manufactures its controllers at TSMC and other fabs as logic devices, not NAND Flash itself. The company's latest E28 controller uses TSMC's 6 nm process node. While Phison's supply chain appears intact, the company may be arranging NAND Flash purchases on behalf of customers, explaining the need for faster settlements. This situation could involve Phison handling design and logistics for SSD makers, requiring quick contract settlements to secure the best NAND Flash prices for customers.