The AI wave is reshaping the global storage market landscape, with North America and China serving as twin engines, pushing enterprise solid-state drives (eSSD) toward a structural demand inflection point. According to TrendForce data, major US cloud service providers (CSPs) have successively raised their eSSD procurement forecasts over the past two weeks, driving total eSSD orders in the fourth quarter of this year to potentially surpass the historic record set in the third quarter. According to Citi Research in a report released on September 21, driven by the growing adoption of continual learning technology, eSSD demand is projected to grow 52.9% year-over-year in 2027, with the NAND supply-demand gap widening to -6.1% by then. The demand structure is also undergoing a qualitative shift: high-capacity, low-cost QLC (quad-level cell) products are rapidly rising, standing alongside the high-performance TLC products that previously dominated the market, signaling that eSSD application scenarios have expanded from AI model training and inference to a broader range of AI application layers. Industry insiders noted that due to NAND manufacturers strengthening capacity and pricing controls, upward pressure on eSSD prices is expected to persist through the fourth quarter.
Two Major Demand Engines: North American Agent AI and China's KV Cache Offloading
Industry experts point out that eSSD demand in the second half will be driven by two main forces: the expansion of Agent AI in North America and the application of KV cache offloading technology in China. In North America, as Agent AI adoption accelerates, demand for large-scale real-time data retrieval and caching is surging sharply. TrendForce analysis indicates that Agent AI, when making autonomous decisions and taking actions, requires rapid access to and storage of large volumes of contextual data, which will significantly boost demand for high-performance eSSD. Citi Research also noted that continual learning technology requires AI systems to continuously absorb new information while retaining historical data, generating sustained demand for high-capacity storage. In China, AI companies represented by DeepSeek are actively promoting KV cache offloading solutions—a technology that migrates lower-priority cache data from high-performance memory (HBM, GDDR) to high-speed, high-capacity QLC solid-state drives during inference, reducing dependence on expensive high-performance memory while improving model inference efficiency and compressing overall costs.
QLC Reshapes AI Infrastructure Architecture
The core feature of this round of demand growth is the comprehensive rise of QLC products. Cloud service providers are actively leveraging QLC to balance high capacity with cost efficiency, with application scenarios covering vector database construction—a core component of AI search and recommendation systems. TrendForce believes this shift may drive a QLC-centric restructuring of AI infrastructure design, with the impact extending beyond the procurement adjustments of a few hyperscale cloud providers. Citi Research further noted that QLC-based near-GPU storage solutions will gradually gain market acceptance to support more efficient data retention and retrieval near accelerators for AI systems. Additionally, demand for advanced storage solutions such as XL Flash and HBF, as well as storage complementary technologies like CXL, will also rise in tandem. Over a longer cycle, Citi forecasts that high-density eSSD demand will grow 53% and 41% year-over-year in 2027 and 2028 respectively, with HDD-to-SSD replacement demand also providing additional support for high-density storage adoption. Although consumer-grade NAND demand is under pressure due to weakness in the PC and mobile terminal markets, Citi believes strong enterprise-level AI demand is sufficient to offset this drag.
Supply Tightens, NAND Makers' Pricing Power Strengthens
Demand expansion is driving the NAND supply-demand balance to accelerate in favor of sellers. Citi Research forecasts NAND demand to grow 29% and 33% year-over-year in 2027 and 2028 respectively, while supply growth is only 21% and 25%—the gap stems from storage manufacturers generally prioritizing capital expenditure toward DRAM and HBM capacity expansion, with relatively restrained new investment in NAND, creating supply-demand gaps of -6.1% in 2027 and -5.5% in 2028 (compared to an estimated -0.8% in 2026). TrendForce also noted that major NAND manufacturers including Samsung Electronics, SK Hynix, Micron, Kioxia, and YMTC are strengthening control over capacity allocation and pricing in the enterprise market, making further eSSD price increases highly likely. In the second quarter of this year, in terms of the eSSD market landscape, Samsung Electronics ranked first with $14.154 billion in revenue and a 35.1% market share; SK Hynix and Solidigm combined achieved $8.631 billion, accounting for 21.1%; Micron ranked third with $6.983 billion and a 17.1% share. In the Chinese market, YMTC is expected to gain share improvement opportunities driven by the surge in KV cache offloading demand. Citi Research maintains a "Buy" rating on both Samsung Electronics and SK Hynix, believing both are poised to benefit from tightening NAND fundamentals and AI-driven structural storage demand growth.