Memory Market to Diverge by 2027: DRAM Remains Tight, NAND Flash Faces Downward Reversal

TrendForce's latest memory industry research indicates that memory demand in 2027 will continue to be driven by AI applications. DRAM will maintain a tight supply situation due to HBM continuously displacing production capacity and strong demand for AI servers, leading to increased procurement momentum for both CPU memory and HBM, supporting firm price trends. In contrast, NAND Flash will see supply become more relaxed in the second half of 2027 due to concentrated new capacity releases and continuously weakening end-consumer demand, potentially facing price correction pressure.

DRAM Supply Growth Lags Behind Demand Growth

TrendForce states that in response to medium- to long-term demand driven by AI infrastructure expansion, major DRAM manufacturers have already initiated capacity expansion plans. In the short term, suppliers are actively increasing capacity at existing facilities while accelerating process upgrades and reducing product conversion frequency to support overall bit supply growth in 2026.

Although several suppliers plan to bring new capacity online in 2027, constraints such as construction timelines, equipment relocation, and raw material lead times mean that most new fabs will begin volume production in the second half of 2027. Considering production cycles, significant output contributions are expected to materialize in 2028.

Moreover, since the wafer input required for HBM manufacturing is significantly higher than that for conventional DRAM, the additional wafer starts cannot be proportionally converted into effective bit output. These factors will limit the overall DRAM bit supply growth in 2027, leading to continued market supply tightness.

On the demand side, supported by continued high capital expenditures from North American cloud service providers (CSPs), accelerated shipments of next-generation CPU platforms from Intel and AMD, and the gradual commercialization of Agentic AI, the year-on-year growth in global server shipments in 2027 is expected to exceed the 17% growth seen in 2026. Additionally, increasing per-unit HBM capacity and the introduction of new specifications such as SOCAMM will significantly boost per-server memory capacity, helping maintain high DRAM bit demand growth in 2027.

In contrast, consumer devices such as smartphones and laptops are expected to see continued shipment declines in 2027. As brands pass on component cost increases, leading to higher end-product prices, consumer upgrade willingness is being negatively impacted.

TrendForce notes that the sufficiency ratio (supply vs. demand bits) for DRAM in 2026 will range between -1% and -2%. In 2027, as demand growth outpaces supply growth, the supply-demand gap will further widen. However, major CSPs maintained capital expenditures at historical highs in 2026, with some even reporting negative cash flow. If memory prices remain high in 2027, their share of total CSP capital expenditure will rise. Whether this will impact CSPs’ 2027 capital spending plans and memory procurement remains to be seen.

NAND Flash Capacity Expansion Leads to Supply-Demand Reversal

In 2026, NAND Flash manufacturers primarily increased bit supply through process node advancements. Due to strong demand for AI servers and high-capacity enterprise SSDs, suppliers increased the supply share of enterprise SSDs to mitigate profitability risks from weak consumer demand. In 2027, as major manufacturers accelerate their transition to higher-layer-count products and new fab capacity gradually comes online, the growth rate of bit supply is expected to exceed that of 2026, leading to significant expansion in overall production scale.

On the demand side, stable server deployment demand and strong procurement of high-speed, high-capacity enterprise SSDs by CSPs and enterprise customers—especially QLC SSDs—will be the main drivers supporting NAND Flash bit demand growth in 2027. Consumer electronics, however, will continue to face suppressed demand due to rising end-product prices.

In 2027, with new capacity gradually ramping up and weak consumer electronics demand persisting, the market will experience a structural supply-demand reversal. TrendForce has previously indicated that the sufficiency ratio will turn positive in 2027, shifting the supply-demand balance toward surplus. However, if Agentic AI adoption achieves breakthrough progress, it could once again boost demand for high-speed SSDs, bringing overall supply and demand closer to equilibrium.