The global data center market is showing signs of being reshaped into a two-pillar structure, from being led by U.S. Big Tech to recently including China. As Changxin Memory Technologies (CXMT) ramps up capacity and its output is absorbed by domestic large cloud service providers (CSPs), some expect global DRAM supply to tighten further. As a result, Samsung Electronics and SK hynix are likely to gain stronger pricing power.
◇ Large-scale Chinese CSP data center investment in full swing
On the 31st, market research firm Rystad Energy projected that China's data center capacity will rise from 32 gigawatts (GW) at the end of last year to above 60 GW by 2030. Market research firm Dell'Oro Group forecast that cumulative global data center capital spending will exceed $3 trillion (about 4,160 trillion won) by 2030. That is nearly double its January outlook of $1.7 trillion.
The expansion of capital spending by China's four major cloud service providers (CSPs) is also being confirmed in concrete figures. Alibaba said its investment in cloud and artificial intelligence (AI) infrastructure over the next three years will surpass its cumulative investment over the past 10 years. ByteDance Ltd. is also reportedly reviewing plans to spend $59 billion to $70 billion this year on data centers and AI computing infrastructure. That would be more than double from a year earlier.
In addition, Chinese AI accelerators such as Huawei Ascend are assessed to have lower compute efficiency than Nvidia's products. Because they require more chips and memory to handle the same computational workload, they are seen as a factor further boosting demand for server memory. Market research firm Counterpoint Research forecast that in 2026, server DRAM and high bandwidth memory (HBM) will account for 57% of total DRAM bit shipments (65% by revenue).
◇ Direct supply from Samsung and SK is limited; pricing power strengthened via indirect channels
Industry observers say it will be difficult for Samsung Electronics and SK hynix to directly supply Chinese CSPs. As the U.S. government has put advanced memory at or above HBM2 (first-generation HBM) on a licensing list for exports to China and applies a de facto presumption of denial, it is effectively difficult for Chinese CSPs to purchase HBM from Samsung Electronics or SK hynix directly.
However, analysts say the increased demand will be absorbed by Chinese companies such as Changxin Memory Technologies (CXMT), which will in turn exacerbate the global DRAM shortage and, through an indirect route, bolster domestic companies' bargaining power for commodity and server DRAM. CXMT recently raised 14.4 trillion won through a listing to expand capacity, but the technology gap is still seen as about three years in DRAM and around five years in HBM. Samsung Electronics is responding by leveraging this gap and filling a sizable portion of its capacity with five-year long-term agreements (LTA).
A memory industry official said, "As the U.S. and China expand data center investment at the same time, the global DRAM shortage is likely to last longer than expected," while adding, "CXMT is increasing its capacity, but in both quality and quantity it still has a large gap with Samsung Electronics and SK hynix to fully meet the memory needs of China's rapidly growing AI infrastructure."