Goldman Sachs bombshell report: The most serious memory chip shortage in fifteen years is approaching, even if consumer demand collapses, it cannot be stopped

# By Xu Chao

The Worst Memory Chip Shortage in History is Coming! Goldman Sachs Raises Expectations of Tight Supply-Demand, Warns of the Biggest DRAM Shortfall in 15 Years and a Record NAND Shortage in 2026. Booming AI server demand accounts for more than half of DRAM supply. Analysts warn that even in an extreme scenario where demand for smartphones and PCs slumps sharply, robust server demand can absorb the impact and keep the market tight. Surprisingly, while releasing this bullish report on the memory industry, Goldman Sachs downgraded Micron's rating to Neutral with a target price of $235, citing that "most of the positives have been priced in".

Goldman Sachs has warned that the market is on the eve of the most severe memory chip supply shortage in the past 15 years.

According to information from the Zhuifeng Trading Desk, in a report released on February 8, Goldman Sachs stated that the global memory market will experience one of the worst supply shortages in history in 2026-2027, with the supply-demand gaps for the three major categories of DRAM, NAND and HBM all expanding significantly. More importantly, even in an extreme scenario where demand for smartphones and PCs plummets sharply, strong server demand can cushion the impact and sustain the tight market conditions.

Yet, in a surprise to the market, Goldman Sachs downgraded Micron to Neutral with a target price of $235 while issuing this bullish report on the memory sector, reasoning that "most of the favorable factors have been reflected in the prices". For investors, this means that the prosperity of the memory industry is highly certain, but the valuation differentiation of individual stocks is intensifying, and targets such as Samsung Electronics and SK Hynix have greater allocation value.

## DRAM Supply Shortfall Hits the Worst Level in 15 Years

Goldman Sachs has sharply raised its expectations for the DRAM supply shortage.

The latest forecast shows that the DRAM supply deficit will reach 4.9% and 2.5% in 2026 and 2027 respectively, far exceeding the previous estimates of 3.3% and 1.1%. Among them, the supply shortage in 2026 will be the most severe in the past 15 years.

The core driver of this tight situation is the explosive growth in server demand.

Goldman Sachs raised its 2026/2027 demand forecast for server DRAM (excluding HBM) by 6%/10%, expecting the growth rates for these two years to reach 39% and 22% respectively. When HBM is included, server-related DRAM demand will account for 53% and 57% of the global total demand, making servers the most important driver of DRAM demand.

In stark contrast, Goldman Sachs lowered its DRAM demand forecasts for PCs and smartphones.

The growth rate of mobile DRAM demand is expected to slow sharply from the high double digits in the past few years to 7% in 2026, and the growth rate of PC DRAM demand will only be 5%. Goldman Sachs cut its 2026/2027 mobile DRAM demand forecasts by 7%/7% and PC DRAM demand forecasts by 3%/5%, mainly reflecting the lowered shipment forecasts by the global team and the reduction in per-device capacity due to the rapid rise in memory costs.

On the supply side, Goldman Sachs expects global DRAM supply to grow by 21%/19% in 2026/2027, a slight upward revision from the previous estimate.

The core reason is the limited clean room space of major suppliers, making it difficult to achieve substantial capacity growth in the short to medium term. Only Samsung's P4 plant has sufficient flexibility to add new capacity, while SK Hynix's M15X clean room space is mainly used for HBM. Mass production at Samsung's P5 plant and Hynix's Yongin plant may not start until the second half of 2027, meaning limited upside for supply before then.

## NAND Market Faces One of the Biggest Shortages in History

The supply-demand dynamics in the NAND market have also tightened significantly. Goldman Sachs expects the NAND supply deficit to be 4.2%/2.1% in 2026/2027, higher than the previous estimates of 2.5%/1.2%. This will be one of the largest shortages in the history of the NAND industry.

The strong growth in enterprise SSD demand is the main driving force. Goldman Sachs raised its 2026/2027 enterprise SSD demand forecasts by 14%/14%, expecting growth rates to hit 58%/23%, with their share of global NAND demand rising to 36%/39%.

Analysts believe that the ICMSP (Inference Context Memory Storage Platform) architecture launched by NVIDIA at CES 2026 will create a large amount of new NAND demand.

Based on the configuration of an additional 16TB of storage per GPU and a 512GB on-board SSD per BlueField DPU, Goldman Sachs estimates that the Rubin platform alone will bring incremental NAND demand of 29EB/79EB in 2026/2027, accounting for 3%/6% of total demand. This forecast is consistent with SanDisk's comment that ICMSP will drive 75-100EB of new demand by 2027.

NAND demand in the mobile and PC segments is significantly weak.

Goldman Sachs cut its 2026/2027 mobile NAND demand forecasts by 6%/7%, expecting mobile NAND demand to register zero growth for the first time in 2026. Demand forecasts for client SSDs in the PC segment were also lowered by 1%/1%, with zero growth also expected in 2026, both hitting historical lows.

Supply discipline remains sound, and Goldman Sachs expects global NAND supply to grow by 18%/18% in 2026/2027. Major suppliers are focusing their capital expenditure on DRAM, and for NAND, they are more focused on technology migration rather than increasing wafer capacity. Meaningful increases in NAND wafer capacity are likely limited to Samsung's P4 plant and Kioxia's Kitakami plant, but both companies will continue to focus on migrating to higher-layer 3D NAND.

## HBM Market Size Raised to $75 Billion

Goldman Sachs raised its 2026/2027 HBM TAM (Total Addressable Market) forecast by 8%/9% to $54 billion/$75 billion (up from $50 billion/$69 billion). The upward revision mainly reflects improved HBM demand for GPUs and ASICs.

Of particular note is the accelerating demand for ASICs.

Consistent with the global team's view on the accelerated adoption of ASICs in servers, Goldman Sachs raised its 2026/2027 HBM demand forecasts for ASICs by 27%/14% respectively, while only raising GPU HBM demand forecasts by 1%/5%. ASICs are expected to account for 33%/36% of HBM demand in 2026/2027 (up from the previous estimate of 28%/34%).

In terms of supply and demand, although Goldman Sachs raised its industry HBM capacity forecast, mainly due to the accelerated capacity expansion by Samsung and SK Hynix, the magnitude of the demand upgrade is larger. As a result, the HBM industry supply deficit is expected to reach 5.1%/4.0% in 2026/2027, far higher than the previous forecast of 0.7%/1.6%.

Goldman Sachs expects the industry's HBM capacity to reach approximately 515,000 wafers per month by the end of 2026 (up from the previous estimate of 485,000 wafers per month) and 595,000 wafers per month by the end of 2027 (up from 565,000 wafers per month). On a low base of a 15% decline in 2025, Samsung's HBM business is expected to grow by 157% in 2026, with revenue approaching $15 billion. After growing by about 116% in 2025, SK Hynix's growth will be more moderate in 2026, but it will still maintain a leading market share of about 52%.

## BOM Cost Analysis: Tight Supply-Demand Persists Even in Extreme Scenarios

Goldman Sachs conducted a detailed BOM (Bill of Materials) cost analysis to assess the rising memory cost burden and its potential impact on demand.

For smartphones, by the third quarter of 2026, the DRAM and NAND costs of the iPhone are expected to reach about 23% of the total BOM, the highest level since 2010, compared with 10% in the third quarter of 2025. The memory cost ratio of Samsung's Galaxy S series is expected to hit about 29%, a sharp increase from 13% in the third quarter of 2025.

For PCs, taking Dell's XPS series as a sample, memory costs are expected to reach 17% of the total BOM by the third quarter of 2026, compared with 7% in the third quarter of 2025.

Crucially, however, even in a highly negative scenario—with smartphone shipments falling 11% year-on-year (base case: -6%), per-device DRAM capacity growth at only 9% (base case: +14%), PC shipments falling 10% (base case: -5%), and per-device DRAM capacity growth at only 5% (base case: +10%)—2026 DRAM demand growth can still reach 21%, and the industry supply deficit remains at 1.7% (base case: 4.9%).

This analysis confirms that while higher memory costs may lead to demand destruction and lower DRAM content adoption in PCs/smartphones, given the significant expected supply shortage this year, the DRAM industry's supply and demand will remain tight even in a highly negative scenario.

## Investment Recommendations: Samsung and Hynix More Attractive

Goldman Sachs reaffirmed its Buy ratings on Samsung Electronics, SK Hynix, SanDisk, Tokyo Electron, Ulvac and Disco.

**Samsung Electronics (Buy, target price: 205,000 KRW)** is set to be a key beneficiary due to its large exposure to the traditional memory sector.

Goldman Sachs expects traditional DRAM pricing to rise by about 176-184% year-on-year in 2026, with operating profit margins reaching 71%/66% (2026/2027), near historical highs. Coupled with the significant improvement in its HBM business, operating profit is expected to surge more than fourfold year-on-year to over 180 trillion KRW in 2026, with ROE approaching 30%, a level not seen in the past 20 years. The current share price corresponds to a 2026 P/E ratio of 7.4x and a P/B ratio of 1.9x.

**SK Hynix (Buy, target price: 1.2 million KRW)** is expected to achieve unprecedented profit margins—nearly 80% for DRAM and over 40% for NAND in 2026. With its solid leading position in the AI memory field, the company's ROE is expected to exceed 70%, the highest level ever.

In a surprise to the market, Goldman Sachs downgraded **Micron** to Neutral with a target price of $235, citing that "most of the positives have been priced in".

Although Goldman Sachs recognizes Micron's consistent execution in its HBM product roadmap and expects it to capture about 20% of the fast-growing, high-margin market, it believes the risk-reward is roughly balanced at the current valuation level, and HBM pricing may pull back in 2026 due to an increase in suppliers (such as Samsung).

For equipment stocks, Goldman Sachs emphasized that **Tokyo Electron (Buy, target price: 43,000 JPY)** has a relatively high market share in leading DRAM manufacturing tools, covering EUV coat/develop, capacitor etch, batch deposition and supercritical dry clean tools.

Among mid-cap and small-cap stocks, **Ulvac (Buy, target price: 8,400 JPY)** is highly recommended as a key beneficiary of DRAM capital expenditure (especially from Samsung). For backend equipment, the firm remains bullish on **Disco (Buy, target price: 68,000 JPY)**, which holds a dominant market share in HBM grinding and dicing tools.

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