"AI storage tax"! Trendforce says: In 2027, storage will account for 68% of major cloud providers' capital expenditures.

According to the latest storage industry research report by TrendForce, major global cloud service providers (CSPs) are accelerating investment in AI infrastructure. In 2026, their capital expenditures are expected to surge 98% year-on-year; in 2027, the growth rate will still remain at 50%. In this round of spending expansion, the role of storage is becoming increasingly prominent. The agency estimates that DRAM and NAND Flash combined will account for 47% of CSPs’ total capital expenditures in 2026, and will further climb to 68% in 2027. In other words, for every 100 yuan spent by cloud providers in capital expenditure, nearly 70 yuan will be directed toward storage by 2027. The rapid rise in this ratio is driven by a sharp jump in storage contract prices. Price Surge: Server DRAM May See Over Threefold Increase in Two Years TrendForce points out that starting in the second half of 2025, storage contract prices will rise significantly, substantially increasing storage’s share in CSP expenditures. Specifically: - Server DRAM: Contract prices will cumulatively increase 64% in the second half of 2025, and are expected to rise another 270% in 2026. - Enterprise SSD (NAND Flash): Prices will rise about 35% in the second half of 2025, and are expected to cumulatively increase 235% in 2026. - HBM: Contract prices may increase 70% to 140% in 2027. The agency states that although some long-term agreements (LTA) signed from the second quarter of 2026 include price caps that may limit further price increases, overall, “storage contract prices are expected to remain at a high level in 2027, continuing to be a major factor driving up storage’s share in CSP capital expenditures.” Supply-Side: HBM and RDIMM Will Account for 51% of DRAM Bit Supply in 2026 Beyond price increases, structural changes in demand are also noteworthy. The agency estimates that in 2026, HBM and RDIMM together will account for 51% of DRAM bit supply—suppliers are prioritizing limited capacity for server applications. By 2027, as process migrations advance and new wafer fabs ramp up in the second half, the combined bit supply of server DRAM and HBM is expected to increase by 27%. The agency points out that the combination of rising prices and increased supply will drive storage's share of CSP capital expenditures to 68% in 2027. Two Chain Reactions: Chip Price Hikes and Architecture Restructuring TrendForce believes that high storage costs will have two major impacts on the AI ecosystem. First, they provide justification for price hikes of AI chips. The agency states, “Storage contract price increases, especially HBM price hikes, will give server and AI chip suppliers such as NVIDIA more reasons to raise product prices.” Cloud providers may then need to further increase capital expenditures to maintain set volumes of AI chip purchases. Second, they force cloud providers to optimize storage architecture. Another response is for cloud providers to more actively optimize AI system storage architectures, reducing storage capacity per system to alleviate high cost or supply allocation pressures for DRAM and NAND Flash, while still meeting AI chip and server shipment targets. The agency lists several possible adjustment strategies, including: adjusting RDIMM configurations, reducing the capacity of integrated HBM in future AI chips, and exploring AI ASIC solutions that directly solidify model architectures within the chip. Risk Warning and Disclaimer The market involves risks, and investment requires caution. This article does not constitute individual investment advice, nor does it take into account the special investment goals, financial circumstances, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific situation. Investment based on this is at your own risk.