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Samsung and SK Hynix NAND margins projected to hit record 50% on AI server SSD demand
Wednesday, February 4, 2026 at 12:44 AM
Samsung and SK Hynix are projected to reach record-breaking NAND margin rates of 40-50% in the first half of the year, driven by aggressive price hikes and surging demand for server SSDs. This shift is fueled by AI infrastructure investments from big tech companies, with NVIDIA actively ordering QLC and TLC products. The tight supply environment is exacerbated by conservative CapEx in NAND equipment by major manufacturers.
Context
Samsung and SK Hynix are projected to reach NAND profit margins of 40% to 50% by the first half of 2026, signaling a major structural turnaround for the flash memory sector. This surge is primarily driven by the rapid expansion of AI infrastructure, where a transition toward inference workloads has triggered massive demand for high-capacity enterprise SSDs (eSSDs). Next-generation AI accelerators are now requiring over ten times the storage of previous models, redefining NAND as a high-margin necessity rather than a cyclical commodity.
To sustain these elevated margins, both giants are maintaining strict supply discipline. Samsung and SK Hynix are reducing annual wafer output by roughly 4.5% and 10% respectively to pivot production toward advanced 321-layer and QLC technologies. With average transaction prices recently spiking by over 60%, this strategic shift effectively ends the era of oversupply. For investors, this represents a fundamental re-rating of the NAND business as a critical, high-profit pillar of the global AI supply chain.
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