Citi Forecasts 53% Surge in Enterprise SSD Demand by 2027 on AI Boom

Demand for enterprise solid-state drives (eSSDs) is projected to surge by 52.9% year-over-year in 2027, fueled by the rapid expansion of artificial intelligence applications, according to a new forecast from Citi. The bank anticipates that this growth will contribute to a significant tightening of the overall NAND memory market.

The AI Catalyst

Citi analysts attribute the explosive growth to the increasing adoption of AI technologies, particularly in continual learning and inference applications. These systems require the constant ingestion of new information while retaining vast amounts of previously learned data, creating substantially higher storage requirements.

Key demand drivers identified by the bank include:

• The need for larger storage pools located closer to AI accelerators for efficient data retrieval.
• Rising adoption of advanced solutions like XL Flash, HBF, and storage-complementary technologies such as CXL.
• A trend in Chinese AI data centers to increasingly favor SSDs over traditional hard-disk drives (HDDs), which could provide additional demand for QLC-based SSDs from 2027 onwards.

Overall, Citi forecasts that total SSD demand, including consumer devices, will grow by 45.0% in 2027.

NAND Market to Tighten

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The surge in AI-related storage is expected to create a supply-demand imbalance in the NAND flash memory market. Citi projects that NAND demand growth will reach 29% in 2027 and 33% in 2028, significantly outpacing anticipated supply growth of 21% and 25% for those years, respectively.

This imbalance is exacerbated by memory suppliers prioritizing capital expenditures on DRAM and High-Bandwidth Memory (HBM) capacity over new NAND production. Consequently, the bank forecasts the NAND supply-demand ratio will reach negative 6.1% in 2027 and negative 5.5% in 2028, indicating a progressively tighter market.

Outlook for Memory Suppliers

While Citi notes that consumer NAND demand from the mobile and PC markets may soften, the robust growth in AI inference-related demand is expected to more than offset this weakness. The bank anticipates that high-density eSSD demand, specifically, will grow 53% in 2027 and 41% in 2028.

Based on this outlook for a tightening market and strong enterprise demand, Citi maintained its Buy ratings on major memory producers Samsung Electronics (KS:005930) and SK Hynix (KS:000660).