On March 18, executives from Tencent addressed the ongoing surge in memory chip prices, noting that the burgeoning demand for artificial intelligence (AI) has spurred a broad-based recovery in the demand for various key components. This includes Dynamic Random-Access Memory (DRAM), High-Bandwidth Memory (HBM), Central Processing Units (CPUs), as well as Solid-State Drives (SSDs) and Mechanical Hard Drives (HDDs). Presently, securing orders for these components necessitates placing requests months, quarters, or even years ahead of time. Suppliers are giving precedence to large-scale, stable customers, such as Tencent Cloud, leaving smaller cloud service providers grappling with challenges in securing a consistent supply chain.

In light of these market dynamics, the industry finds itself with little alternative but to transfer the escalating costs onto the final product prices. Over the last 24 hours, several Chinese cloud service providers have already announced price hikes for their offerings.