Micron, Samsung, and SK Hynix have already allocated their complete 2027 DRAM and HBM production capacity, confirming that 2027 will be the tightest memory supply cycle on record.
According to DIGITIMES, Samsung Electronics, Micron Technology, and SK Hynix have fully allocated their DRAM and High Bandwidth Memory (HBM) capacity for 2027, covering both large customers under long-term agreements and smaller buyers. Samsung Electronics, Micron Technology, and SanDisk have also sold out their full-year NAND Flash capacity in advance, with Kioxia Holdings and SK Hynix expected to complete their allocations by the end of August 2026.
This situation means that buyers who have not yet secured capacity allocations now face a scenario in 2027 where no inventory is available. Cloud service giants and major AI firms continue to receive priority, further squeezing supply for consumer devices such as smartphones and PCs.
The AI wave is the core driver behind this capacity sell-out. Major manufacturers have begun signing three- to five-year long-term supply agreements with key clients, shifting the memory market away from its traditional commodity cycle toward a sustained seller's market structure. Chen Li-Pai, Chairman of ADATA, confirmed that the three major manufacturers have already sold out their entire 2027 capacity, with HBM and AI server-related applications expected to account for approximately 70% of total DRAM output.
With total production capacity constrained, manufacturers are prioritizing orders from cloud service providers and major AI companies, directly reducing allocation quotas for smartphone and PC makers. Industry estimates suggest that actual capacity made available by manufacturers typically reaches only 60% to 70% of buyers' original targets. Consequently, smartphone and PC manufacturers are expected to receive significantly lower DRAM allocations in 2027 compared to 2026.
SK Group Chairman Chey Tae-won recently stated that demand for AI semiconductors in 2027 is expected to surge by 60% to 100% compared to 2026, with overall storage demand projected to increase by 50% to 60%. The supply-demand gap is likely to widen further, leading to the most severe shortage and imbalance in history in 2027.
The NAND Flash market has more suppliers, leaving buyers with some room for negotiation. Observers remain skeptical about a NAND supply-demand reversal in 2027, arguing that newly released capacity combined with weak consumer demand could lead to a looser market in the second half of 2027. However, industry insiders remain cautious about this view. Supply chain sources note that demand for enterprise-grade solid-state drives will remain robust in 2027, and supply tightness is expected to persist into 2028. Chen Li-bai pointed out that strong enterprise storage demand is tightening supply simultaneously in both the NAND Flash and hard disk drive markets.
Amid ongoing capacity constraints in 2026, multiple cloud service giants and brand vendors are aggressively competing for capacity at any cost. Major players are securing future capacity well in advance and completing transactions under deposit-prepayment models. Capacity allocation covers not only large customers with long-term agreements but also smaller and medium-sized buyers. Industry sources noted that some manufacturers remain unaware that July to August represents a critical window for capacity allocation, adding, "No one is publicizing this—everyone's worried that if too many players rush in, their own share will shrink."
As the majority of 2027 capacity has already been allocated, final pricing for DRAM and NAND will likely be determined closer to actual shipment dates. Consequently, the pace of price increases in 2027 is expected to be more moderate compared to the exponential surge witnessed in 2026. However, "persistently high prices" will become the new normal. Memory manufacturers, holding significant control over capacity allocation, are expected to continue exerting upward pressure on market quotations. As a result, overall supply constraints and cost pressures on end users are unlikely to ease substantially in the near term.