Report: The production capacity of the three major storage manufacturers for 2027 is already sold out in advance, confirming that "next year will be the most supply-short year for storage"

The entire production capacity of the three major DRAM manufacturers for 2027 has already been sold out in advance, as the AI boom is pushing the memory market into an unprecedented period of structural shortage.

On August 4, according to DIGITIMES, which cited industry sources, the 2027 DRAM and High Bandwidth Memory (HBM) capacity of Samsung Electronics, Micron, and SK Hynix has been fully allocated, covering both large long-term agreement customers and small to medium buyers.

At the same time, the entire year's NAND Flash production capacity from Samsung Electronics, Micron, and SanDisk has also been pre-sold, while Kioxia and SK Hynix are expected to complete their allocations no later than the end of August 2026.

This development means that buyers who have not secured capacity are facing a “no goods to buy” situation in 2027, while cloud service giants and major AI players continue to take priority, crowding out supply for consumer terminals such as mobile phones and PCs.

However, as the major capacities are gradually set, the industry expects that price increases in 2027 will slow down compared to 2026, but short-term supply tension and terminal cost pressures will be difficult to ease substantially.

The AI wave is the core driver behind this round of sold-out production capacity. Major manufacturers have recently signed 3- to 5-year Long Term Agreements (LTAs) with key customers, pushing the memory market from a traditional commodity cycle into a long-term seller’s market.

ADATA Chairman Chen Lipei confirmed that the three major manufacturers' 2027 capacity is already sold out, with HBM and AI server-related applications expected to account for about 70% of DRAM capacity.

With total capacity limited, manufacturers are prioritizing the needs of cloud service providers (CSPs) and major AI companies, directly squeezing the quotas available for mobile phone and PC manufacturers.

The industry estimates that manufacturers can only fulfill about 60-70% of buyers’ original targets for capacity, and the DRAM quota available to mobile phone and PC manufacturers for 2027 is expected to decrease significantly compared to 2026.

SK Group Chairman Chey Tae-won recently stated that demand for AI semiconductors in 2027 could increase by 60% to 100% over 2026, and total demand for memory is estimated to grow by 50% to 60%. The supply-demand gap may continue to widen, leading to the most severe shortage and supply-demand imbalance in history in 2027.

Compared to DRAM, the NAND Flash market has more suppliers, giving buyers some bargaining power.

There is skepticism in the industry about a supply-demand reversal in NAND in 2027, as new capacity comes online and consumer demand remains weak, leading some to expect a looser supply-demand balance and rising price pressures in the second half of 2027.

However, industry insiders remain cautious about this view.

Related operators point out that enterprise solid-state drive (SSD) demand will remain strong in 2027, with tight supply possibly extending into 2028. Manufacturers should not be too optimistic about expansion evaluations.

Chen Lipei also noted that robust enterprise storage demand is driving synchronized supply constraints in the NAND Flash and hard drive markets.

A structural change is occurring in the current capacity allocation model.

According to supply chain sources, as the undersupply situation for 2026 production capacity continues to spread, multiple cloud service giants and brand manufacturers are competing fiercely for capacity, with many locking in future capacity early and adopting the vendor-driven prepaid deposit model for transactions.

Capacity allocation is not limited to customers with long-term agreements but also includes small and medium-sized buyers who have secured 2026 capacity, even if manufacturers are unwilling to sign long-term contracts. Each manufacturer will internally coordinate and then inform buyers of their allocated amounts.

Industry insiders revealed that some companies are still unaware that July to August is a critical window for capacity allocation, "No one spreads the news because they’re afraid too many will join in and their own share will decrease."

Despite ongoing capacity constraints, the price trajectory may differ from that of 2026.

It is widely believed in the industry that since the main capacity has largely been allocated, the final prices for DRAM and NAND will not be confirmed until closer to actual shipment dates. The price increases in 2027 are likely to be milder than the sharp spikes seen in 2026.

However, “high price normalization” will become the new normal.

With memory manufacturers holding the power of allocation, they are expected to maintain strong market prices, and overall supply tension and end-product cost pressures will be challenging to alleviate in the short term.

For manufacturers who have not yet secured capacity, being forced to accept higher procurement prices or passively facing supply constraints will be the main risks in 2027.