NAND Flash Supply Growth to Outpace Demand in 2027, Easing Supply Constraints in 2H27, Says TrendForce
TAIPEI, Taiwan, July 21, 2026 (GLOBE NEWSWIRE) -- TrendForce’s monthly July NAND Flash update reveals that the NAND Flash market has remained undersupplied throughout 2026, driven by surging AI-related demand and limited capacity expansion.
Looking towards 2027, server demand is anticipated to stay strong. However, ongoing process migrations by suppliers, steady growth in bit output, and persistent weak demand in consumer electronics are likely to gradually restore market balance. Consequently, the current supply tightness is expected to diminish in the latter half of 2027.
TrendForce notes that in 2026, NAND Flash suppliers will rely primarily on process node migrations to meet rising demand, as existing fab space remains constrained and manufacturers continue prioritizing DRAM capacity expansion. These capacity constraints are expected to persist into 2027.
Korean, U.S., and Japanese suppliers are therefore likely to continue upgrading existing production lines and selectively expanding output at current facilities to increase market supply. Meanwhile, Chinese suppliers are expected to significantly boost production capacity as new manufacturing equipment comes online, raising their share of global NAND Flash bit output to nearly 19%.
Shipments of Intel’s and AMD’s next-generation server platforms are expected to accelerate during the second half of 2026, driving full-year server shipments to grow by 17% YoY.
Looking ahead to 2027, the commercialization of Agentic AI applications is expected to sustain demand for general-purpose servers. At the same time, improvements in component availability—including a significant easing of server CPU supply constraints and more stable memory supply under long-term supply agreements (LTAs)—are expected to remove key bottlenecks to system production. Together, these factors are projected to further accelerate server shipment growth in 2027.
In contrast, demand from the smartphone and notebook PC markets continues to weaken. TrendForce forecasts global smartphone production to decline 15–20% YoY in 2026. Although AI-enabled premium smartphones are expected to support demand in the high-end segment, limited recovery in end-market demand and increasing consumer price sensitivity will likely result in another year of declining smartphone production in 2027, albeit at a more moderate pace.
The notebook market is also expected to remain under pressure. Following an estimated shipment decline of around 10% in 2026, notebook shipments are projected to contract slightly again in 2027 due to persistently high component costs, including memory and CPUs.
TrendForce points out that although servers now account for more than 40% of total NAND Flash bit demand, smartphones and notebooks together still represent nearly 40% of overall demand, meaning the consumer market continues to play a decisive role in determining overall market conditions.
Meanwhile, NAND Flash manufacturers continue to maintain relatively lean inventory levels. While module makers have accumulated higher inventories due to weak consumer demand, inventory held by other customer groups remains largely under control. Based on these supply and demand dynamics, TrendForce estimates that the NAND Flash market will record a 4–5% supply deficit in 2026, resulting in continued shortages. However, the supply-demand balance is expected to turn positive in the second half of 2027, allowing supply constraints to gradually ease.
More Memory Industry Analysis
Leading chipmakers and CSPs have pursued both hardware and software innovations to overcome memory bottlenecks as surging KV Cache demand in the first half of 2026 collided with constrained memory supply. Penguin Solutions, Marvell, and Meta have introduced KV Cache servers and CXL switches to expand the memory hierarchy and increase effective memory capacity. Meanwhile, NVIDIA and Google have developed technologies such as KVTC and TurboQuant to compress KV Cache and reduce memory consumption.
TrendForce provides an in-depth analysis of these architectural innovations in its report, "Overcoming the Memory Bottleneck: CXL Expansion and KV Cache Compression Innovations." For more comprehensive market data and technical insights, please refer to the full report at the link below: https://www.trendforce.com/research/download/RP260715HU
Media Contact
Ms. Peng Chen
pengchen@trendforce.com
Ms. Pinchun Chou
pinchunchou@trendforce.com
About TrendForce
TrendForce is a global leader in technology industry analysis and consulting services. With deep expertise spanning foundry, DRAM, HBM, NAND Flash, AI servers, robotics, near-eye displays, display panels, LEDs, MLCC, and green energy, it also offers in-depth research into key market drivers such as AI, automotive technologies, 5G/6G communications, LEO satellites, and the IoT.
Backed by a team of top industry professionals, TrendForce has been at the forefront of global market research for over 25 years. More than 60% of its clients are among the world’s top 500 companies. TrendForce’s global footprint includes Taipei, Shenzhen, Silicon Valley, New York, and Tokyo. With timely and strategic industry analysis, TrendForce delivers the critical information that empowers businesses to make smarter, faster decisions.
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Forecast Breakdown of NAND Flash Bit Demand by End Applications, 2026-2027
While servers now account for more than 40% of total NAND Flash bit demand, smartphones and notebooks together still represent nearly 40% of overall demand.
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