Hetzner (European hosting provider) to increase prices by up to 38%

Original Article ↗ Hacker News Discussion ↗

European hosting provider Hetzner is raising prices on its cloud and dedicated servers by up to roughly a third, citing surging costs for RAM, SSDs and other hardware driven largely by AI and cloud demand. Commenters note that even after the hike Hetzner remains cheaper than major US clouds, but worry that similar increases at rivals like OVH signal a broader hardware squeeze that will hit startups, hobby projects and smaller providers hardest. Much of the debate centers on whether this is a temporary demand shock or a longer-term structural shift in the memory and storage markets, and what role regulation or market forces should play in restoring affordability.

Scope and Structure of Hetzner’s Price Increases

  • Increases affect both cloud (VPS) and dedicated servers, for new and existing customers from 1 April 2026.
  • Indicative ranges from the thread:
    • Cloud VMs: ~36–38% increase.
    • Bare metal: ~10–15% (many examples show +1–5 €/month).
    • Some very old/auction servers also rise slightly (cents to a few euros).
  • A separate table shows massive RAM add‑on hikes (quoted as ~575% and “effective immediately”), but multiple commenters find inconsistencies and suspect errors in Hetzner’s published list.

Hardware Shortages and RAM Pricing

  • Consensus that DRAM has gone up ~5x in ~6–12 months, with SSD/HDD prices also up and some parts “sold out” through the year.
  • Several argue Hetzner is simply passing through sharply higher component costs; others note they had previously absorbed increases (energy, IPv4) but can’t anymore.
  • Debate over RAM trajectory:
    • One side: prices have “stabilized at 5x” and will gradually fall as new capacity comes online.
    • Other side: manufacturers are not increasing non‑HBM capacity, so shortages and high prices may persist for years.

AI, Venture Capital, and Market Distortion

  • Strong sentiment that AI hyperscalers are “vacuuming up” DRAM, SSDs, HDDs, and even wafers, using speculative VC money rather than sustainable profits.
  • Some call this an “AI tax” on everyone else; proposals include special AI taxes or even rationing of components.
  • Others counter that this is textbook demand shock: prices reflect genuine (if bubble‑driven) demand, not classic manipulation.
  • Disagreement over whether this is a cyclical spike or a structural shift that permanently hands consumer/SMB hardware markets to Chinese manufacturers.

Comparisons and Alternatives

  • Even after increases, many say Hetzner remains far cheaper than AWS/GCP/DO for equivalent specs; some note DigitalOcean is vastly more expensive at similar RAM/disk.
  • OVH is also raising prices, in some cases more aggressively. Other EU options mentioned: Netcup, Scaleway, Contabo, Seeweb, Leaseweb; all expected to face similar pressure.
  • Some users plan to:
    • Lock in/add extra dedicated servers now.
    • Move tiny workloads to home servers, old PCs, or Raspberry Pis (with cautions about power costs, ISP terms, and insurance).

EU vs US Clouds and Policy Backdrop

  • Part of Hetzner’s growth is attributed to European customers wanting to avoid US‑based clouds (Cloud Act, perceived political instability, tariffs).
  • Discussion that Europe is still dependent on non‑EU DRAM/CPU supply and lacks strong domestic memory fabs, limiting its ability to shield itself from AI‑driven shortages.

Impact on Developers and Software Practices

  • Concern that higher entry‑level VPS prices hurt hobby projects, indie SaaS, and small startups built on sub‑10€/month boxes.
  • Counter‑argument: if a few extra euros kill a startup, the business was too fragile; but several note side‑projects do die over exactly these recurring costs.
  • Some see a “silver lining”: pressure to reduce bloat—less Electron, fewer oversized Kubernetes clusters, more efficient languages (Rust/Go), and a return to optimizing for limited RAM and storage.