The AI wave is reshaping the global storage market landscape, with North America and China both acting as growth engines, pushing enterprise solid-state drives (eSSD) toward a structural demand inflection point.

According to TrendForce data, over the past two weeks major US cloud service providers (CSPs) have successively raised their eSSD procurement forecasts, pushing total fourth-quarter eSSD orders toward potentially surpassing the record high set in the third quarter.

According to reports, Citi Research in a September 21 report predicted that driven by the proliferation of continual learning technology, eSSD demand will grow 52.9% year-on-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 accelerating their rise, keeping pace with the high-performance TLC products that previously dominated the market, marking an expansion of eSSD application scenarios from AI model training and inference to broader AI application layers. Industry insiders said that due to NAND manufacturers strengthening capacity and pricing controls, upward pressure on eSSD prices is expected to continue into the fourth quarter.

Two major demand engines: North American Agent AI and China's KV cache offloading

Industry experts point out that second-half eSSD demand will be jointly driven by two main threads—the expansion of Agent AI in North America and the application of KV cache offloading technology in China.

In North America, as Agent AI accelerates its adoption, demand for large-scale real-time data retrieval and caching is surging rapidly. TrendForce analysis notes that Agent AI, when making autonomous decisions and taking actions, requires rapid access to and storage of large amounts 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, thereby creating 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 reshaping 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 procurement adjustments by a handful of hyperscale cloud providers.

Citi Research further notes 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. In addition, demand for advanced storage solutions such as XL Flash and HBF, as well as storage complementary technologies like CXL, will also rise in tandem.

From a longer-term perspective, Citi forecasts that high-density eSSD demand will grow 53% and 41% year-on-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 that strong enterprise AI demand is sufficient to offset this drag.

Supply side tightening, NAND manufacturers' pricing power strengthening

Demand expansion is driving the NAND supply-demand balance to tilt Accelerating toward sellers. Citi Research forecasts that NAND demand will grow 29% and 33% year-on-year in 2027 and 2028 respectively, while supply growth will be 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 (estimated at only -0.8% in 2026).

TrendForce also notes 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 revenue of $14.154 billion and a market share of 35.1%; SK Hynix and Solidigm together 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.