Citi Projects 53% Surge in AI-Driven Enterprise SSD Demand by 2027, Recommends Samsung and SK Hynix

Demand for enterprise solid-state drives (eSSDs) is poised for a dramatic surge by 2027, fueled by the explosive growth of artificial intelligence, according to a new research report from Citi. The bank identified Samsung Electronics and SK Hynix as two memory chip leaders set to benefit from this structural shift.

AI Driving Unprecedented Demand

Citi analysts wrote in a note Monday that "continuous learning and AI inference will drive a significant increase in eSSD demand," projecting a 52.9% year-over-year jump in 2027. The bank anticipates overall SSD demand will grow by 45% in the same period, with particularly strong growth in Quad-Level Cell (QLC) storage as AI systems require larger data pools located closer to accelerators.

This robust enterprise demand is expected to more than compensate for potential weakness in the consumer sector. While demand for consumer NAND may slow due to sluggish smartphone and PC markets, Citi believes "strong enterprise AI demand is sufficient to offset the decline in consumer NAND demand."

Tightening Supply Outlook

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The supply landscape for NAND flash memory is expected to tighten considerably, adding to the demand-driven pressure. Citi noted that memory manufacturers are prioritizing production capacity for DRAM and high-bandwidth memory (HBM) over NAND to meet the needs of AI accelerators.

This strategic shift in production is forecast to widen the NAND supply deficit from 0.8% this year to 6.1% in 2027 and 5.5% in 2028. The trend is compounded by AI data centers, particularly in China, increasingly replacing traditional hard disk drives (HDDs) with higher-performance SSDs, according to the report.

Analyst Recommendations

Based on these market dynamics, Citi reiterated its "Buy" ratings for both Samsung Electronics and SK Hynix. The firm stated that both companies are well-positioned to capitalize on the tightening NAND supply-demand fundamentals and the structural, long-term growth in storage demand driven by the AI sector.