Memory Costs to Command Nearly 30% of Data Center Capital Spending by 2026

• April 3, 2026

In a significant shift in data center investment patterns, memory-related expenses are set to make up nearly 30% of the total capital expenditure (capex) for major hyperscale data center operators by 2026. This marks a sharp increase compared to the roughly 8% share memory held in 2023 and 2024, according to analysts from SemiAnalysis.

Memory Costs Surge Amid Growing Data Center Demands

As data centers continue to expand to meet the soaring demand for cloud services, artificial intelligence workloads, and data-intensive applications, the infrastructure that supports high-speed and large-capacity memory is becoming increasingly critical. The elevated memory spending reflects the evolving architecture requirements of hyperscalers looking to optimize performance, power efficiency, and latency.

Capital expenditures for memory components are forecasted to escalate steadily, with analysts predicting an ongoing rise beyond 2026. This trend suggests nearly a fourfold increase in memory-related costs over the four-year period, underscoring its growing importance within the overall data center buildout and upgrade cycles.

Hyperscale operators rely heavily on cutting-edge memory technologies such as DDR5, high-bandwidth memory (HBM), and emerging non-volatile memory solutions to support workloads ranging from advanced AI inference to real-time analytics. The sharp cost increase highlights the premium placed on integrating these technologies at scale.

This mounting emphasis on memory is also reflective of broader industry shifts, where storage and compute costs are being balanced against memory investments to achieve optimal system architectures. Memory, traditionally a smaller portion of the capex budget, is rapidly becoming a central focus for innovation and budget allocation.

Given this dynamic, suppliers and manufacturers of memory components are positioned to see heightened demand and strategic importance as data center operators prioritize substantial memory capacity and bandwidth enhancements moving forward.

Overall, the changing capex distribution illustrates how data center economics are adapting to new technological imperatives, positioning memory as a pivotal factor in the next generation of hyperscale infrastructure developments.

Memory expenses are projected to rise to 30% of data center capital costs by 2026, a fourfold increase from 2023 levels, according to analysts.