Citi Predicts Storage Supply Shortage Will Last Until 2031

Citi analysts point out that the ongoing learning of artificial intelligence will drive a significant increase in storage demand, leading to a supply shortage in the market that will continue until 2031. Continuous learning reinforces models by training on new tasks and knowledge, creating a sustained demand for model updates and access to historical data, which boosts storage usage for products such as HBM, server DDR5, and eSSD. Citi expects HBM bit demand to grow by 62% year-on-year to 75.2 billion gigabits by 2027, and by 69% year-on-year to 127 billion gigabits by 2028. Global DRAM demand is projected to increase by 30% and 35% year-on-year in 2027 and 2028, respectively, while supply is expected to grow only by 19% and 22% during the same period, resulting in supply-demand ratios of -8.7% and -9.7%. In terms of NAND, demand is expected to grow by 29% and 33% year-on-year in 2027 and 2028, respectively, exceeding supply growth of 21% and 25%, with supply-demand ratios of -6.1% and -5.5%. Citi's preferred storage targets include Samsung Electronics, SK Hynix, Micron, Sandisk, and Kioxia, corresponding to the logic of storage shortages driven by continuous learning, demand for HBM and server DDR5, DRAM supply shortages, and tightening supply of high-density eSSD and NAND.

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