The Memory Boom Is Already Creating Its Own Bust

If something cannot go on forever, it will stop.
- Herb Stein, Senior Fellow. American Enterprise Institute

What Happened

• TrendForce says memory's share of CSP (cloud service provider) spending will hit 68% of capex in 2027.
  • The exact percentage is hard to take literally: the maths don't work.
  • The more important signal is the underlying price shock: TrendForce expects server DRAM prices to rise roughly 270% in 2026.
• That kind of pricing changes both sides of the market.It drives buyers to engineer less memory into systems.It also creates an enormous incentive for new supply to enter.

What It Means

• The immediate effect is obvious: unprecedented margins for incumbent memory suppliers.
  • HBM and server DRAM are scarce, AI demand is large, and suppliers have been cautious about adding capacity after previous memory busts.
  • But that is attracting a rapidly growing group of companies into the category, while existing suppliers are reluctantly scaling capacity.
• CSPs are aggressively engineering memory out of systems.