Explosive AI Growth is Straining the Memory and Storage Supply Chain
REDWOOD CITY, Calif. – February 12, 2026 – According to a newly published forecast report by Dell’Oro Group, the trusted source for market information about the telecommunications, security, networks, and data center industries, the global Data Center Accelerator market is projected to grow at a 25 percent compound annual growth rate (CAGR) over the next five years. Growth is being supported primarily by the continued adoption of AI applications, which require specialized, accelerator-equipped infrastructure optimized for such workloads.
“The global server and storage semiconductor and component market is entering a new phase of expansion driven by AI,” said Baron Fung, Senior Research Director at Dell’Oro Group. “Merchant GPUs and custom accelerators are at the center of this growth cycle, enabling a broad range of AI and domain-specific workloads.”
“Hyperscale cloud service providers are increasingly deploying custom accelerators to improve efficiency and potentially reduce cost, while significant engineering efforts are underway to improve accelerator performance per watt from the package level through the rack level. At the same time, complementary technologies such as CPUs, HBM, NICs, and storage must advance in parallel to fully realize system-level gains, and the pace of accelerated infrastructure buildouts is expected to continue placing pressure on supply–demand dynamics for key components, particularly memory and storage,” added Fung.
Additional highlights from the Data Center IT Semiconductors and Components 5-Year January 2026 Forecast Report:
- Merchant GPUs and custom accelerators will continue to dominate market spending, with custom accelerators gaining share as hyperscale cloud providers pursue greater efficiency and cost optimization.
- Components supporting general-purpose compute and storage infrastructure, such as CPUs and front-end NICs, are projected to grow at modest single- to low-double-digit rates, reflecting improved server utilization and longer replacement cycles.
- Ongoing strong demand for memory and storage is expected to constrain supply, increase costs, and incentivize vendors to develop more resource-efficient architectures that improve total cost of ownership.
Dell’Oro Group’s Data Center IT Semiconductors and Components 5-Year Forecast Report provides a complete, in-depth analysis of the market with table covering manufacturers’ revenue, and unit shipments for technologies such as Accelerators, CPUs, Memory, Network Interface Cards (NICs), Storage Drives such as HDDs and SSDs. For more information about the report, please contact us at dgsales@delloro.com.
Dell’Oro Group is a market research firm that specializes in strategic competitive analysis in the telecommunications, security, enterprise networks, and data center markets. Our firm provides in-depth quantitative data and qualitative analysis to facilitate critical, fact-based business decisions. For more information, contact Dell’Oro Group at +1.650.622.9400 or visit www.delloro.com.
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