UBS: Expects 73% of Mega Cloud Provider Capital Expenditure in 2027 to Flow into Storage, Equivalent to $761.3 Billion

August 2nd, UBS stated that as the demand from AI GPU manufacturers and hyperscale cloud service providers surges, coupled with the rising average selling price of storage products, storage spending is rapidly increasing. It is projected that by 2027, the total capital expenditure of the top 11 global hyperscale cloud service providers will reach $10.403 trillion, with storage spending amounting to $761.3 billion, representing an increased share of 73%.

The total capital expenditure of hyperscale cloud service providers is set to increase from $504 billion in 2025 to $873.9 billion in 2026, further rising to $10.403 trillion in 2027. During the same period, storage spending will increase from $72.8 billion to $335.7 billion and $761.3 billion, with year-over-year growth rates of 361% and 127% in 2026 and 2027, respectively.

Looking at specific products, HBM spending is expected to rise from $24 billion in 2025 to $144.4 billion in 2027, with the blended average selling price increasing from $1.52 per Gb to $2.77 per Gb; DDR spending will increase from $30.2 billion to $448.9 billion, with the average selling price rising from $0.43 per Gb to $2.30 per Gb; while NAND spending will increase from $18.7 billion to $168.1 billion, and the average selling price will rise from $0.07 per GB to $0.27 per GB.

UBS pointed out that to meet the expenditure and demand growth, storage manufacturers must expand their capacity, but wafer fab space, equipment lead times, and workforce constraints still pose significant bottlenecks.