Goldman Sachs blockbuster report: The most severe memory chip shortage in fifteen years is approaching, and even a collapse in consumer demand cannot stop it.

Goldman Sachs warns that the market is on the eve of the most severe memory chip supply shortage in the past 15 years.

According to info from Chic Trader Desk, Goldman Sachs stated in its February 8 report that the global memory market will experience one of the worst supply shortages in 2026-2027, with large supply-demand gaps in DRAM, NAND, and HBM categories. More importantly, even in an extreme scenario where smartphone and PC demand plummets, strong server demand will absorb the shock and maintain the market's tight posture.

However, surprisingly, while Goldman Sachs published a bullish report on the memory industry, it downgraded Micron's rating to Neutral, with a target price of $235, reasoning that "most positives have been priced in." For investors, this means industry prosperity is highly certain, but individual stock valuations have become more differentiated, and stocks like Samsung Electronics and SK Hynix have greater allocation value.

DRAM Supply Gap Hits Worst Level in 15 Years

Goldman Sachs has sharply raised its forecast for DRAM supply shortages.

Latest projections show that the shortfall for DRAM supply in 2026 and 2027 will reach 4.9% and 2.5%, far above previous estimates of 3.3% and 1.1%. Of these, the shortage in 2026 will be the most severe in the last 15 years.

The core driver of this tightness is the explosive growth in server demand.

Goldman Sachs has raised its forecast for server DRAM (excluding HBM) demand in 2026/2027 by 6%/10%, expecting annual growth rates to reach 39% and 22%. If HBM is included, server-related DRAM demand will account for 53% and 57% of global total, making servers the number one driver of DRAM demand.

In sharp contrast, Goldman Sachs has lowered its DRAM demand forecast for PCs and smartphones.

Mobile DRAM's growth rate is expected to slow significantly from high double digits in recent years to 7% in 2026, and PC DRAM is also expected to rise only 5%. Goldman Sachs lowers its 2026/2027 mobile DRAM demand forecast by 7%/7% and PC DRAM by 3%/5%, mainly reflecting lower shipment forecasts globally and a reduction in per-device memory content due to rapidly rising costs.

On the supply side, Goldman Sachs expects global DRAM supply growth of 21%/19% in 2026/2027, only a slight increase from previous forecasts.

The core reason is limited clean room space at major suppliers, making it difficult for significant capacity growth in the short and medium term. Only Samsung's P4 plant is flexible enough to add new capacity, while SK Hynix's M15X clean room will mainly be used for HBM. Samsung P5 and Hynix's Yongin plant may only begin mass production in the second half of 2027, meaning limited supply upside until then.

NAND Market Faces One of Largest Shortages in History

NAND supply-demand dynamics are also tightening sharply. Goldman Sachs predicts supply shortfalls of 4.2%/2.1% for NAND in 2026/2027, higher than previous forecasts of 2.5%/1.2%. This will be one of the biggest shortages in NAND industry history.

Robust enterprise SSD demand is the main driver. Goldman Sachs raises its enterprise SSD demand forecast for 2026/2027 by 14%/14%, expecting growth rates of 58%/23%, with market share in global NAND demand rising to 36%/39%.

Analysts believe Nvidia’s launch of ICMSP (Inference Context Storage Platform) architecture at CES 2026 will create large incremental NAND demand.

Based on each GPU adding 16TB of storage and each BlueField DPU equipped with 512GB onboard SSD, Goldman estimates that just the Rubin platform will bring 29EB/79EB of incremental NAND demand in 2026/2027, accounting for 3%/6% of total demand. This forecast matches SanDisk’s comment that ICMSP will drive 75~100EB incremental demand by 2027.

Mobile and PC-end NAND demand will be significantly weak.

Goldman Sachs lowers its 2026/2027 mobile NAND demand forecast by 6%/7% and expects zero growth in mobile NAND demand in 2026 for the first time. PC client SSD demand is also lowered by 1%/1%, and zero growth is predicted for 2026, both at all-time lows.

Supply discipline is good, and Goldman Sachs expects global NAND supply growth of 18%/18% in 2026/2027. Major suppliers focus capital spending on DRAM, and in NAND area, prioritize technology migration over wafer capacity additions. Meaningful wafer additions may be limited to Samsung’s P4 plant and Kioxia’s Kitakami fab, but both will continue focusing on higher-layer 3D NAND migration.

HBM Market Size Upgraded to $75 Billion

Goldman Sachs has raised its 2026/2027 HBM TAM (Total Addressable Market) projection by 8%/9% to $54 billion/$75 billion (previously $50 billion/$69 billion), mainly reflecting improved HBM demand for GPU and ASIC.

Particular attention should be paid to accelerating ASIC demand.

In line with the global team's view on accelerated ASIC adoption in servers, Goldman Sachs raises its HBM demand forecast for ASICs in 2026/2027 by 27%/14%, while GPU HBM demand is raised by only 1%/5%. ASICs are expected to account for 33%/36% of HBM demand in 2026/2027 (previous estimate: 28%/34%).

In terms of supply and demand, though Goldman Sachs upgraded HBM industry’s supply forecast thanks to Samsung and SK Hynix’s faster expansion, since demand is rising more, they expect HBM shortages of 5.1%/4.0% in 2026/2027, well above previous estimates of 0.7%/1.6%.

Goldman Sachs expects industry HBM capacity to reach about 515,000 wafers/month by late 2026 (previous: 485,000 wafers/month), and 595,000 wafers/month by late 2027 (previous: 565,000 wafers/month). After a 15% decline last year, Samsung’s HBM business is expected to grow 157% in 2026, with revenue nearing $15 billion. SK Hynix, after about 116% growth last year, will see milder growth in 2026 but continue to lead market share at about 52%.

BOM Cost Analysis: Supply-Demand Tight Even in Extreme Scenarios

Goldman Sachs conducted detailed BOM (Bill of Materials) analysis, assessing the rising burden of memory costs and its impact on demand.

For smartphones, by Q3 2026, DRAM and NAND costs for iPhones are expected to account for ~23% of total BOM, the highest since 2010, compared to 10% in Q3 2025. For Samsung Galaxy S series, memory’s share of BOM is expected to reach ~29%, up sharply from 13% in Q3 2025.

For PCs, using Dell XPS as an example, memory cost is expected to reach 17% of total BOM by Q3 2026, compared to 7% in Q3 2025.

However, crucially, even in highly negative scenarios—smartphone shipments down 11% YoY (baseline: -6%), per-device DRAM up only 9% (baseline: +14%), PC shipments down 10% (baseline: -5%), per-PC DRAM up only 5% (baseline: +10%)—DRAM demand in 2026 could still grow 21%, with industry shortage at 1.7% (baseline: 4.9%).

This analysis confirms that, while higher memory costs may damage demand and reduce DRAM adoption in PCs/smartphones, given the sharp supply shortage expected this year, DRAM supply-demand will remain tight even in highly negative scenarios.

Investment Recommendations: Samsung and SK Hynix More Attractive

Goldman Sachs reaffirms Buy ratings for Samsung Electronics, SK Hynix, SanDisk, Tokyo Electron, Ulvac, and Disco.

Samsung Electronics (Buy, target price 205,000 KRW) is poised to be the key beneficiary thanks to its huge exposure to traditional memory.

Goldman Sachs expects 2026 traditional DRAM pricing to rise 176-184% YoY, with operating margin reaching 71%/66% (2026/2027), close to all-time highs. Together with significant improvement in HBM, 2026 operating profit will grow over fourfold to more than KRW 180 trillion, with ROE near 30%, not seen in 20 years. Current stock price reflects 7.4x 2026 P/E, 1.9x P/B.

SK Hynix (Buy, target price KRW 1.2 million) is set to achieve unprecedented margins—2026 DRAM operating margin near 80%, NAND over 40%. With its solid leadership in AI memory, company ROE could exceed 70%, highest ever.

Surprisingly, Goldman Sachs downgraded Micron to Neutral, target $235. Reason: "Most positives have been priced in."

Although Goldman Sachs recognizes Micron’s sustained execution on the HBM roadmap and expects it to capture about 20% of the fast-growing, high-margin market, they believe risk/reward is roughly balanced at current valuation, and 2026 HBM pricing may retreat as more suppliers (e.g., Samsung) enter.

For equipment stocks, Goldman Sachs highlights Tokyo Electron (Buy, target JPY 43,000) for its strong share in leading DRAM manufacturing tools, including EUV coating/develop, capacitor etch, batch deposition, and supercritical dry clean.

Among small/mid caps, Ulvac (Buy, target JPY 8,400) is recommended as a key beneficiary of DRAM (especially Samsung's) capex. For back-end equipment, Disco (Buy, target JPY 68,000) remains favored, with dominant share in HBM grind and dicing tools.

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