Chinese Cloud Prices Rise in Last 24 Hours
On March 18, a Tencent executive confirmed that intense demand for artificial intelligence hardware is creating severe supply chain constraints, forcing the industry to pass rising costs on to customers. The demand spike affects not only advanced components like DRAM and High-Bandwidth Memory (HBM) but also CPUs and storage drives, with orders now requiring commitments months or even years in advance. This announcement came as multiple Chinese cloud vendors raised their prices in the preceding 24 hours.
The supply squeeze creates a competitive advantage for major operators. The Tencent executive noted that suppliers are prioritizing their largest and most stable clients, such as Tencent Cloud. This dynamic leaves smaller cloud companies struggling to secure the necessary hardware, potentially consolidating market share among the largest providers who can maintain a stable supply chain.
Chipmakers See Shortages Lasting Until 2030
The price increases are a direct consequence of a structural deficit in the global semiconductor market. The chairman of SK Group, whose SK Hynix subsidiary controls 57% of the critical HBM market, warned the current wafer shortage could persist until 2030. He characterized the imbalance as a fundamental reallocation of the memory market driven by AI, not a temporary cyclical downturn.
This long-term supply constraint is supported by demand forecasts from leading chip designers. Nvidia's CEO recently projected the company would have $1 trillion in AI chip orders by 2027, double its forecast from the previous year. The industry's shift from training AI models to deploying them for inference tasks is creating sustained demand for advanced processors, granting significant pricing power to hardware manufacturers and signaling a prolonged period of higher costs for cloud providers and their enterprise customers.
Edgen Stock·Mar 18 2026, 14:38
