Citigroup Forecasts Extended Memory Chip Supply Shortage Driven by AI Demand

Citigroup analysts have projected that the ongoing demand for memory chips, fueled by advancements in artificial intelligence, will lead to a significant supply shortage that could last until 2031. The firm highlights that continuous learning in AI applications will necessitate increased memory capacity, particularly for products such as High Bandwidth Memory (HBM), server DDR5, and enterprise solid-state drives (eSSD).

The analysts estimate that demand for HBM will surge by 62% year-on-year, reaching 75.2 billion gigabits by 2027, and further increase by 69% to 127 billion gigabits in 2028. In the broader market, global DRAM demand is expected to rise by 30% in 2027 and 35% in 2028, while supply growth is projected at only 19% and 22%, respectively. This imbalance will result in supply-demand ratios of -8.7% and -9.7% for those years.

In the NAND sector, demand is anticipated to grow by 29% and 33% in 2027 and 2028, respectively, outpacing supply growth of 21% and 25%. This will create supply-demand ratios of -6.1% and -5.5%. Citigroup has identified several key players in the storage market, including Samsung Electronics, SK Hynix, Micron, Sandisk, and Kioxia, as beneficiaries of the anticipated shortages driven by the increasing requirements of AI technologies.

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Source: KLEA News