TrendForce: AI triggers "fundamental transformation," storage industry revenue surge will continue through 2027

TrendForce believes that the memory market is undergoing a fundamental transformation driven by artificial intelligence innovation.

On January 22, the latest research from TrendForce shows that as data access continues to grow, AI systems are becoming increasingly reliant on high-bandwidth, high-capacity, and low-latency DRAM, while the role of NAND flash in rapid data transmission is becoming ever more prominent, making memory a key component of AI infrastructure.

Driven by limited production capacity and rising quota demand, memory prices have continued to climb, with industry revenue repeatedly hitting new highs. Historically, the single-quarter price increase peak for DRAM has been around 35%, but in the fourth quarter last year, driven by strong DDR5 demand, DRAM prices surged by 53% to 58%.

TrendForce expects the price increase in the first quarter of this year to exceed 60%, with some categories nearly doubling in price. The bullish trend is expected to continue for the next three quarters. Additionally, TrendForce projects that the memory market scale will soar from $551.6 billion in 2026 to $842.7 billion in 2027, a year-on-year growth of 53%.

DRAM demand growth far outpaces NAND flash

In early 2025, the DRAM market's sentiment was bleak due to geopolitical tensions and macroeconomic uncertainties, with recovery in consumer applications particularly hampered.

However, as the market becomes clearer in the second half of the year, North American cloud service providers have sharply increased capital investment. Rapid deployment of AI servers and substantial growth in memory procurement have triggered a new round of price increases.

Driven by surging data access demand, growth in DRAM demand far exceeds other categories.

TrendForce forecasts DRAM market revenue will reach $165.7 billion in 2025, up 73% year-on-year, significantly surpassing NAND flash’s $69.7 billion in revenue for the same period. This gap is prompting suppliers to focus more on expanding DRAM production capacity in their strategies.

TrendForce expects DRAM market revenue to reach $404.3 billion in 2026, a 144% year-on-year surge.

NAND flash prices driven upward by AI agents

The strong growth momentum of the NAND flash market should not be underestimated.

Wallstreetcn mentions that Nvidia stated at the 2026 International Consumer Electronics Show that AI is fundamentally reshaping the entire computing stack.

As generative AI evolves into intelligent agent systems with long-term reasoning abilities, AI agents need to frequently access massive vector databases to support retrieval-augmented generation.

Such tasks involve large datasets and highly random access patterns, significantly increasing demand for high-IOPS enterprise SSDs. This shift is expected to further drive up NAND flash prices.

TrendForce forecasts first-quarter prices will rise 55% to 60% quarter-on-quarter and remain on an upward trend throughout the year. In 2026, NAND flash market revenue is expected to jump 112% year-on-year to $147.3 billion.

Supply shortages persist until 2027

Across the entire memory market, supply shortages show no signs of easing, and pricing power remains firmly in the hands of suppliers.

TrendForce emphasizes that the AI boom is advancing comprehensively across hardware stacks, system architectures, and software layers, making memory an irreplaceable key component in AI computing.

Supported by sustained demand for AI servers, high-performance computing, and enterprise storage, contract prices for DRAM and NAND Flash are expected to continue rising through 2027.

Thus, revenue growth in the memory industry is expected to keep expanding into 2027, consolidating its position as a core beneficiary of the AI era.

Risk Disclosure and DisclaimerThe market has risks, and investment requires caution. This article does not constitute personal investment advice, nor does it take into account individual users' specific investment goals, financial situations, or needs. Users should consider whether any opinions, views, or conclusions in this article are appropriate for their situation. Investments made accordingly are at your own risk.