Morgan Stanley Backs DRAM Over NAND, Forecasts NAND Demand to Reach 400EB in 2026

According to Morgan Stanley's July 2 report, the investment thesis for memory chips is shifting from across-the-board gains to structural differentiation. The bank recommends prioritizing DRAM over NAND Flash and favoring chipmakers over module manufacturers.

The report predicts AI-driven NAND demand will surge from 205EB in 2025 to 400EB in 2026 and 609EB in 2027, representing 60% annual growth. This will drive a supply shortage of 15% in 2026 and 9% in 2027. DRAM shows four advantages over NAND: mature long-term agreement mechanisms, stronger demand visibility from AI and servers, constrained advanced manufacturing capacity limiting supply expansion, and potential future HBM4E production further tightening supply.