Citi sees eSSD demand to jump 52.9% in 2027 on AI growth

Investing.com -- Citi projects enterprise solid-state drive demand will increase 52.9% year-over-year in 2027, driven by continual learning technologies and AI inference applications.

The bank expects both AI training and inference demand to grow rapidly from 2027 onward as continual learning technologies advance. These systems require continuous incorporation of new information while retaining previously learned data, creating substantially higher storage requirements.

Total SSD demand is forecast to grow 45.0% in 2027, according to Citi. The bank anticipates rising demand for advanced solutions including XL Flash and HBF, along with storage-complementary technologies such as CXL.

QLC-based near-GPU storage solutions are expected to gain adoption as AI systems require larger storage pools closer to accelerators for efficient data retention and retrieval. AI data centers in China are increasingly considering SSDs over HDDs, which could support additional QLC SSD demand from 2027 onward.

Citi projects NAND demand growth of 29% in 2027 and 33% in 2028, outpacing supply growth of 21% and 25% respectively. Memory suppliers are prioritizing DRAM and HBM greenfield capacity expansion over NAND production.

The bank forecasts high-density eSSD demand will grow 53% in 2027 and 41% in 2028, driven by continual learning and Nvidia's KV-cache offloading trend.

NAND supply-demand conditions are expected to tighten, with the supply-demand ratio reaching negative 6.1% in 2027 and negative 5.5% in 2028, compared to negative 0.8% in 2026.

Consumer NAND demand may soften amid weaker mobile and PC market conditions, but Citi expects rising AI inference-related NAND demand to offset this weakness.

The bank maintains Buy ratings on Samsung Electronics and SK Hynix.

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