SK Hynix expects DRAM demand to grow by the mid-20% range in 2027, while NAND demand is forecast to climb in the high-teens range over the same year. The projections come as artificial intelligence workloads drive demand for memory in data centers, contributing to a supply shortage.
Forecast details
DRAM serves as short-term working memory for computing tasks, while NAND provides storage that retains data when power is off, used in SSDs and phones. Both are currently in short supply. SK Hynix CEO Kwak Noh-jung has said 2027 will bring the worst supply situation the memory industry has faced, and he projected that demand will continue to outrun supply beyond 2030 despite planned expansions.
The company’s mid-20% DRAM estimate is at the upper end of industry projections for 2027 DRAM bit demand growth, which range between 19% and 25%, with much of the range clustered in the low-to-mid 20s. Bit demand measures total memory capacity required rather than the number of chips sold. Rival Micron has expressed similar expectations, adding weight to the forecast.
NAND estimates are slightly lower, with projections placing 2027 demand growth in the high-teens to low-20% range, and supply conditions could ease somewhat later in the year.
Supply constraints
Three bottlenecks prevent supply from easily catching up. First, the equipment needed to expand memory production has long lead times, so new capacity cannot materialize on short notice. Second, major memory manufacturers have reportedly locked in long-term agreements covering approximately 70-80% of their planned 2027 DRAM and NAND output. For high-bandwidth memory (HBM), nearly 100% of production is already spoken for.
Third, HBM itself strains capacity. HBM stacks DRAM layers to move data faster to AI processors, but it consumes more wafer capacity per chip than conventional memory. HBM is expected to use nearly 30% of industry DRAM wafer capacity in 2027, up from around 20% currently, diverting output from the conventional memory market.
Market implications
For memory makers, projected demand growth paired with constrained capacity points toward greater pricing power for companies like SK Hynix and Micron in the coming years. Pre-committed contracts provide visibility, as most of next year’s output is already sold.
Hyperscalers building AI data centers are likely to face rising memory costs, and PC manufacturers are also exposed because they depend on conventional DRAM, which is being crowded out as wafer capacity tilts toward HBM.
What to watch
Capacity expansion is key: if equipment deliveries accelerate or new fabs come online faster than expected, the shortage could soften; if they slip, the squeeze tightens. HBM allocation is another lever, as the share of wafers flowing to high-bandwidth memory directly shapes how much conventional DRAM reaches the broader market. NAND deserves attention too, with projections hinting at possible easing later in 2027, storage could diverge from DRAM and behave more like a traditional cycle.
For now, SK Hynix’s message is blunt: demand is rising faster than factories can respond, contracts are largely signed, and the CEO expects the imbalance to persist well into the next decade.
