Nomura: AI hardware cycle far from over, global server revenue expected to grow 65% in 2027 as supply bottlenecks spread to substrates, PCBs, and optical components

Nomura stated in a July 1 research report that despite possible increased short-term volatility, the current generative AI-driven hardware cycle is not over. The firm noted that while the semiconductor industry is experiencing valuation digestion, order duplication, long-term supply agreements, and price increases—features typical of the late stage of a traditional semiconductor boom—the demand base of this cycle continues to strengthen. Nomura's proprietary tracking data shows that global data center projects have increased from about 240 at the end of March to about 280, with GW-scale projects growing from over 40 to about 50. Global new data center deployment capacity will rise from 26GW in 2026 to 32GW in 2027. Server market growth forecasts have been significantly raised, with global server revenue expected to grow 74% in 2026 and 65% in 2027. Among this, AI server revenue is expected to grow 78% in 2026 and 76% in 2027. Supply bottlenecks in the AI server industry chain are spreading from CoWoS to IC substrates, PCBs, copper-clad laminates, high-end capacitors, power management chips, and optical components.