Citigroup is recommending that investors buy leading memory-chip manufacturers, with analyst Peter Lee warning that AI requirements could create a severe semiconductor shortage in 2027. The bank’s demand projections substantially exceed market expectations, underpinning its positive view after a quarterly selloff in the sector.
Citi forecasts 2027 high-bandwidth memory (HBM) demand of 75.2 billion gigabits, representing annual growth of 62%. That compares with a consensus estimate of about 30%, a gap Citi attributes to investors underestimating the scale of next year’s requirements.
Lee, a Seoul-based analyst, argues that fears about weak demand are overstated. Large orders from companies including Broadcom and Google support his assessment that HBM consumption will be stronger than the market currently anticipates.
Memory suppliers are already experiencing the effects of expanding AI computing needs. Higher consumption has tightened availability and increased chip prices, benefiting SK Hynix and its competitors.
Alongside its demand forecast, Citi anticipates a redistribution of HBM market share. The bank expects improvements in Samsung Electronics’ most advanced HBM products to help it move ahead of SK Hynix in 2027.
Samsung’s share is projected to reach 42% next year, compared with approximately 30% in 2026. Citi estimates that SK Hynix will account for 35%, down from roughly 47% this year, while Micron Technology will retain a 22% share in the market.
Lee’s latest assessment follows a reversal in the sector’s stock-market performance. Micron, Samsung and SK Hynix recorded declines ranging from 7.7% to 33% during the quarter through September as investors questioned the sustainability of AI investment and storage demand. Before that retreat, six successive quarters of gains had taken the shares to record levels.
Recent disclosures from Micron offered further evidence of sustained AI memory demand. The company said Wednesday that customer commitments under long-term supply agreements had reached $32 billion and forecast quarterly revenue exceeding market estimates.
Chipmakers subsequently helped South Korean equities recover on Thursday, with record domestic trade figures that surpassed forecasts also lifting sentiment.
After an intraday decline of as much as 1.1%, the KOSPI finished at 6,971.35, up 133.31 points or 1.95% on Thursday. The recovery broke a three-session run of losses and delivered the benchmark’s largest percentage advance since September 18.
