Skyrocketing RAM Costs Squeeze HP PC Bill of Materials
HP CFO reveals RAM now accounts for 35% of PC costs, up from 15-18%, as global memory shortage drives prices higher. Explore the impact on HP's business and the broader PC market.
RAM costs have skyrocketed, now representing a staggering 35 percent of the bill of materials for HP Inc.'s personal computers, up from a previous range of just 15-18 percent. This dramatic shift, revealed by HP CFO Karen Parkhill during the company's recent Q1 2026 earnings call, illustrates the severity of the ongoing global memory shortage impacting the tech industry.
Parkhill noted that memory costs have increased roughly 100 percent sequentially, and HP expects further increases as the fiscal year progresses. This surge in RAM prices is taking a significant toll on HP's Personal Systems business, with the company forecasting the total addressable market to decline by double digits this calendar year due to higher prices dampening customer demand.
The memory shortage, which has been exacerbated by supply chain disruptions and increased demand for electronic devices during the COVID-19 pandemic, has resulted in a dramatic rise in the cost of RAM - a critical component in modern computers. This squeeze on the bill of materials is forcing HP and other PC manufacturers to make difficult decisions to maintain profitability.
"We have seen memory costs increase roughly 100 percent sequentially, and we do forecast that to further increase as we move into the fiscal year," Parkhill said, according to a transcript of the call provided by Seeking Alpha.
The memory shortage is not limited to HP; it is a widespread issue impacting the entire PC industry. Manufacturers are grappling with how to navigate this challenging environment, as they strive to balance increased costs with maintaining customer affordability and market competitiveness.
As the global supply chain continues to face disruptions and the demand for electronic devices remains high, the RAM price crunch is likely to persist in the near future. HP and its competitors will need to find innovative ways to optimize their supply chains, manage costs, and adapt their product strategies to weather this storm and stay competitive in the rapidly evolving PC market.
Source: Ars Technica
