Global NAND Flash memory shortages could begin to ease during the second half of 2027. TrendForce predicts that growth in supply in bits will surpass demand due to process improvements in South Korea, the United States, and Japan, increased production in China, and persistent weakness in the mobile and PC markets. The forecast indicates a trend toward better balance but does not guarantee an immediate return to pre-crisis prices.
The key points of NAND Flash shortage in 30 seconds
- TrendForce estimates that supply will be 4% to 5% below demand throughout 2026.
- The imbalance could shift into surplus in the second half of 2027.
- Manufacturers will mainly increase production through process improvements and expansion of existing lines.
- China could approach 19% of global bits production.
- Servers will continue absorbing capacity, while demand for mobile devices and laptops declines.
Talking about the “end of the shortage” would be too strong. The consultancy uses a more cautious expression: supply pressures could ease. Slightly exceeding bit production over consumption does not mean all NAND types will be available in sufficient quantities, inventories will recover immediately, or that consumer SSDs will quickly return to their standard prices.
The market is reaching this possible correction after an extraordinary period of price increases. TrendForce estimated that the average contractual NAND price would rise by 55% to 60% in Q1 2026 and by 70% to 75% in Q2. For Q3, another 10% to 15% increase is expected, more moderate due to mobile and PC manufacturers reaching their margin limits and being less able to pass costs to consumers.
More bits without immediately building new factories
Major producers will not solve the shortage by rapidly constructing large-scale factories from scratch. Semiconductor plants take years to build, equip, validate, and reach full-scale yields for mass production.
In 2026, factory space constraints and the focus on DRAM memory have limited NAND expansion. Manufacturers have responded by increasing layer counts, improving yields, and migrating to processes that enable higher storage capacity per wafer.
This approach is known as growth in bits. A factory can process a similar number of wafers, yet deliver more terabytes if each chip contains more memory.
| Ways to Increase Supply | Impact on Production |
|---|---|
| More layers of 3D NAND | Increases capacity per chip |
| More QLC usage | Stores four bits per cell |
| Performance improvements | Reduces defective chips |
| Equipment upgrades | Raises output of current lines |
| Facility expansions | Adds wafers but takes more time |
| New factories | Provides long-term additional capacity |
TrendForce expects South Korean, US, and Japanese manufacturers to continue process upgrades in 2027 and to partially expand some facilities. Chinese companies will move faster as they adopt new equipment. The consultancy calculates that China will approach 19% of global NAND production measured in bits by 2027.
The forecast does not specify how much each company will contribute. The core market remains Samsung Electronics, SK hynix, Solidigm, Kioxia, Micron, and SanDisk. Their combined revenues surpassed $38.9 billion in Q1 2026, an 83.7% increase from the previous quarter mainly due to price hikes and demand for enterprise SSDs.
Producers have prioritized higher-margin products, especially enterprise TLC and high-capacity QLC SSDs. This strategy improves profitability and fulfills data center orders, but reduces the amount of memory available for consumer devices, modules, cards, smartphones, and industrial equipment.
Supply growth will not be uniform. Significant capacity additions were initially expected only by late 2027 or 2028. Improvements within existing plants could partly alleviate shortages sooner, though availability will still depend on memory type and final product.
AI will continue to drive increasing NAND demand in data centers
Server demand shows no signs of decline. TrendForce projects global server shipments will rise 17% in 2026, supported by new Intel and AMD platforms. In 2027, AI application deployment, CPU supply recovery, and long-term purchase agreements could accelerate growth further.
Servers already account for over 40% of NAND demand in bits. Enterprise SSDs are used to store training datasets, vector databases, caches, logs, models, generated content, and data queried by AI agents during operations.
Inference workloads are also changing storage needs. AI systems no longer just load a model and answer questions. Agents can maintain long contexts, query data multiple times, generate files, and chain tools for hours. This activity increases read/write operations and favors high-capacity units with high I/O levels.
The shortage of large-capacity disks adds pressure. Some cloud providers have shifted loads to 122TB and 245TB QLC SSDs due to long mechanical disk delivery times. TrendForce considers this substitution will continue to support NAND demand even as manufacturing expands.
The nine largest cloud service providers are expected to increase their capital expenditure by about 79% in 2026, according to the firm. Part of this budget goes to GPUs and networking, but also to the massive storage needed to run and upgrade new systems.
| Market | TrendForce Forecast |
|---|---|
| Servers in 2026 | Shipments 17% higher |
| Servers in 2027 | Faster growth than 2026 |
| Smartphones in 2026 | Production 15-20% lower |
| Smartphones in 2027 | Further decline but more moderate |
| Laptops in 2026 | About 10% decline |
| Laptops in 2027 | Small additional decrease |
| Bit NAND balance in 2026 | Bit deficit of 4-5% |
| Balance in late 2027 | Possible return to positive margin |
Weak consumer demand is as significant as increased production. Smartphones and laptops still account for nearly 40% of global NAND demand in bits. A drop in their sales could free capacity to partially offset server growth.
TrendForce forecasts that smartphone production will decrease by 15% to 20% in 2026. It will decline again in 2027, but less so, as the market recovery will be limited, and consumers will be more price-sensitive. High-end phones with AI features will sustain some demand but not fully offset overall weakness.
In laptops, deliveries are expected to fall around 10% in 2026 and decline slightly further in 2027. The rising costs of memory and processors are increasing manufacturing expenses, discouraging some brands from upgrading configurations or delaying purchases.
A more balanced market doesn’t mean cheap SSDs
TrendForce’s forecast is based on the NAND bit supply-demand gap, which is projected to shift from a negative of 4-5% in 2026 to positive territory in the second half of 2027. This indicates that incremental production could finally surpass consumption growth.
However, the final SSD price depends on more than just this aggregate ratio. Manufacturers need to rebuild inventories, meet existing cloud provider contracts, and recover investments in equipment and processes. They may also maintain disciplined production to prevent excessive expansion from causing another market crash.
Capacity distribution will continue favoring the most profitable products. Even with enough bits available globally, shortages may persist in specific categories like eMMC and UFS for mobile devices, high-capacity enterprise SSDs, or industrial NAND with long cycles.
Older memory types present a particularly different case. The exit of some manufacturers producing MLC and SLC products has caused a structural shortage that won’t necessarily be resolved by expanding advanced NAND 3D. TrendForce estimates that global MLC capacity will decrease by 41.7% in 2026 due to major providers exiting or reducing production.
For enterprise buyers, the expected improvement in 2027 can help plan for a less tense market, but it doesn’t eliminate the need to secure supplies. Cloud providers are already using long-term agreements, prepayments, and volume commitments to reserve capacity.
Manufacturers of PCs, smartphones, and industrial devices face a different situation. Their tighter margins prevent price competition with large data centers. Their reduced sales help balance the market, but also mean that relief will come from less manufacturing, not a sudden abundance of memory.
Thus, the second half of 2027 is the first credible horizon for easing overall NAND pressure. It will be a gradual improvement based on more bits per wafer, some expansions, and reduced use of personal electronics. It does not necessarily mean the immediate return of cheap SSDs or the end of all supply constraints.
Frequently Asked Questions
When will NAND Flash shortages end?
TrendForce expects the pressure to begin easing in the second half of 2027. The firm does not guarantee that all NAND categories will be free of shortages at that time.
Why does AI consume so much NAND memory?
Data centers need SSDs to store models, databases, content, caches, and large data sets. AI agents perform continuous queries and generate even more data.
Will SSD prices drop in 2027?
A better balance might moderate price increases and enable some reductions later. However, low inventories, long-term contracts, and priority for enterprise products could delay consumer price drops.
How will production increase without building new factories?
Manufacturers will upgrade existing lines, increase layers in 3D NAND, use more QLC memory, and improve manufacturing performance. These measures allow more bits to be produced with a similar number of wafers.
via: wccftech
