Dell CEO Michael Dell recently warned about the global semiconductor supply situation, predicting that the shortage of HBM and DRAM will continue to worsen through 2027.
As demand for artificial intelligence infrastructure continues to surge, global memory capacity growth has failed to keep up with market needs, becoming a key bottleneck constraining the development of the AI server industry.
Currently, Dell's backlog of enterprise and AI server orders has reached a record $95 billion. However, despite strong market demand growth, the company's ability to convert these orders into actual revenue largely depends on securing sufficient memory chip supplies.
In recent years, the rapid development of generative AI and the surging computing demands of hyperscale data centers have made advanced memory products a core resource fiercely contested in the market.
Modern AI servers rely heavily on the synergy between HBM, high-performance GPUs, and AI accelerators to provide the computing power required for large model training and inference. Consequently, while the memory shortage is driving rapid growth in Dell's AI business, it has also become the biggest obstacle limiting its delivery capacity.
Michael Dell believes that memory supply constraints could last up to four years. Since building new semiconductor fabs typically takes several years from planning to full operation, the industry expects much of the new capacity to be fully released only by 2029 or 2030. Until then, the market supply-demand imbalance is expected to persist.
As memory prices continue to rise, manufacturing costs for high-end systems like AI servers are climbing in tandem. This structural shortage not only affects equipment manufacturers' production plans but also places greater pressure on the entire AI supply chain.
Faced with a record-high $95 billion backlog of AI server orders, Dell strives to avoid tying up significant working capital by stockpiling excessive components in advance.
Dell employs a lean inventory model, scheduling DRAM purchases based on final assembly plans and procuring memory only close to the production stage to reduce the risk of inventory backlog and maintain liquidity. This approach helps the company remain more flexible in response to changes in demand.
Meanwhile, Dell has established long-term supply agreements with suppliers and uses customer prepayments to secure advanced memory resources in advance. Similar practices are widely adopted by industry players such as Samsung Electronics and SK Hynix to mitigate the impact of future price hikes and supply fluctuations.