Citigroup Warns of 2026 DRAM, NAND Flash Shortages Due to AI Demand

Citigroup has issued a warning that the demand for dynamic random access memory (DRAM) and NAND flash memory is expected to surge due to the increasing adoption of artificial intelligence (AI). By 2026, both DRAM and NAND flash memory are projected to face a supply shortage, with DRAM's supply-demand ratio anticipated to be -1.8% and NAND flash memory's supply-demand ratio expected to be -4.0%.

The analysts' report highlights the significant impact of AI on the memory market. As AI technologies continue to advance, the demand for high-performance memory solutions is expected to grow exponentially. This increased demand is likely to outpace the current production capabilities of memory manufacturers, leading to a potential supply shortage by 2026.

The report underscores the importance of investing in memory technology to meet the growing demands of AI applications. Companies involved in the production and supply of DRAM and NAND flash memory will need to ramp up their manufacturing capacities to avoid a supply crunch. This includes not only increasing production but also innovating to improve the efficiency and performance of memory chips.

The analysts also note that the current trends in the semiconductor industry, such as rising product prices and export restrictions, are further exacerbating the supply-demand imbalance. These factors, combined with the surge in AI-driven demand, create a challenging environment for memory manufacturers. They must navigate these complexities while ensuring they can meet the increasing needs of the market.

In conclusion, the report from Citigroup serves as a wake-up call for the memory industry. The rapid advancement of AI technologies is driving an unprecedented demand for memory solutions, and manufacturers must act swiftly to address the potential supply shortages. By investing in production capabilities and innovation, the industry can better prepare for the challenges ahead and ensure a stable supply of memory chips to support the growing AI ecosystem.