Memory crunch: Cloud operators may be pushed to splurge 68% of capex on DRAM and NAND
Rising costs of new kit due to soaring memory prices likely to feed into cloud service bills
Cloud operators may soon be forced to spend a significant portion of their capital expenditure (capex) on memory chips, as the cost of DRAM and NAND flash is projected to skyrocket. Market research firm TrendForce predicts that by next year, DRAM and NAND flash will account for more than two-thirds of the capital expenditures of cloud service providers (CSPs), with total capex nearly doubling this year and increasing by an additional 50 percent in 2027.
This surge is driven by increased investment in new infrastructure and soaring memory costs. Server DRAM components are expected to grow by 270 percent year-on-year by the end of 2026, while enterprise SSD prices are forecast to rise by 235 percent over the same period. The demand for high-performance memory from big customers is prompting chip suppliers to prioritize production capacity for server applications.
The effects of memory crunch are already evident in the rising prices of PCs and a decline in PC shipments. Enterprise customers are also feeling the pressure as they face higher costs for memory, which may eventually be passed down to them. As memory expenses consume an increasingly larger share of CSP capex, cloud operators may need to allocate even more funds to infrastructure expansion, leading to potential price increases for users.
Written by urgent.news from The Register's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
