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TrendForce’s latest research on the memory industry reveals that AI will remain the primary driver of memory demand in 2027. However, market dynamics are expected to diverge between DRAM and NAND Flash.
On the DRAM side, continued HBM capacity allocation, robust AI server demand, and growing procurement of CPU memory and HBM are expected to keep supply constrained and prices on an upward trajectory. By contrast, NAND Flash is projected to enter a looser supply environment in 2H27 as new production capacity comes online while consumer electronics demand remains weak, increasing downward pressure on prices.
DRAM supply growth expected to lag behind demand expansion
TrendForce notes that major DRAM suppliers have already initiated expansion plans to address medium- to long-term demand driven by investments in AI infrastructure. In the near term, manufacturers are expanding output from existing fabs, accelerating process migrations, and reducing product conversion frequency to maximize bit output growth throughout 2026.
Although several suppliers plan to bring new capacity online in 2027, construction schedules, equipment installation, and raw material preparation will delay meaningful production ramp-ups until the second half of 2027. Given the semiconductor manufacturing cycle, substantial output contributions are not expected to materialize until 2028.
Additionally, HBM manufacturing requires significantly more wafer input than conventional DRAM, meaning that higher wafer starts do not translate proportionally into additional bit output. These factors will constrain overall DRAM bit supply growth in 2027, keeping market supply tight.
From a demand perspective, continued capital expenditure by North American CSPs, shipments of next-generation CPU platforms from Intel and AMD, and the commercialization of Agentic AI are expected to drive stronger server demand. TrendForce forecasts global server shipments to grow faster in 2027 than the 17% YoY recorded in 2026.
Meanwhile, increasing HBM capacity per AI server and the adoption of new memory standards such as SOCAMM will significantly increase memory content per server, supporting another year of robust DRAM bit demand growth.
In contrast, consumer electronics, including smartphones and notebooks, are expected to remain under pressure. Higher component costs are increasingly being passed on to consumers through higher retail prices, dampening replacement demand and leading to another year of declining shipments in 2027.
TrendForce estimates the DRAM sufficiency ratio at approximately -1% to -2% in 2026. Furthermore, the supply-demand gap is expected to widen further in 2027 as demand growth continues to outpace supply expansion.
However, the firm notes that CSPs’ capital expenditure remained at record levels throughout 2026, with some providers even reporting negative free cash flow. If memory prices remain elevated throughout 2027, memory will account for a larger share of CSP infrastructure spending. Whether this ultimately affects CSP investment plans and memory procurement remains a key variable to watch.
NAND Flash capacity expansion to shift market balance
In 2026, NAND Flash suppliers primarily increased bit output through process technology migration rather than major capacity expansion. Supported by strong demand for AI servers and high-capacity enterprise SSDs, suppliers continued prioritizing enterprise SSD production to offset weaker profitability in consumer markets.
Looking ahead to 2027, accelerated migration to higher-layer NAND products and the gradual ramp-up of new fabs are expected to drive significantly stronger bit supply growth than in 2026, resulting in a substantial expansion of industry output.
Enterprise storage will remain the primary growth engine on the demand side. Robust server deployments will continue to support procurement of high-performance, high-capacity enterprise SSDs by CSPs and enterprise customers, with QLC SSDs expected to account for the largest share of incremental NAND demand. Consumer electronics demand, on the other hand, is expected to remain subdued as higher device prices continue to suppress purchasing activity.
TrendForce expects the NAND Flash market to undergo a structural shift in 2027 as new capacity gradually enters production while consumer demand remains weak. The firm previously forecast that the NAND Flash sufficiency ratio will turn positive in 2027, indicating that the market will transition from a supply-constrained environment to a more balanced market.
Nevertheless, TrendForce notes that a breakthrough in the adoption of Agentic AI could significantly increase demand for high-speed SSDs, helping absorb incremental supply and bringing the overall market closer to equilibrium.
