- Lenovo Reacts Early to Memory Supply Shortage Driven by Aggressive AI Demand
- Semiconductor giants shift production toward high-bandwidth memories for AI servers
- Traditional memory production shrinks as global pricing pressure rapidly intensifies
Lenovo has confirmed that it is stockpiling memory chips and other essential components in response to an increasingly tight global supply chain driven by demand for artificial intelligence.
Company leadership described the situation as an unprecedented AI squeeze, with accelerated purchases by data center operators and cloud platforms limiting availability.
Lenovo’s inventory levels are now approximately 50% higher than normal, affecting its entire range of devices, including the mini PC segment.
Why the memory market is under pressure
Rising memory prices are tied to a broader shift within the semiconductor industry.
Major producers, including Samsung and SK Hynix, have diverted significant manufacturing capacity toward high-bandwidth memory, which is used for AI servers.
This transition has reduced production of traditional memory chips typically used in consumer PCs, smartphones, and gaming devices.
As a result, global memory prices have risen steadily in recent months, impacting manufacturers across the electronics industry.
This situation is already influencing several product lines, particularly systems aimed at business laptop buyers that depend on stable component availability.
Lenovo executives said the buildup is part of a longer-term plan to avoid disruptions through 2026.
The company recently signed long-term supply agreements aimed at ensuring memory availability over the next year.
Its CEO also stated that the company believes these agreements represent optimal contracts under current conditions.
“We signed the optimal contract with key component suppliers to ensure we have enough supply for next year,” said Yang Yuanqing.
“Overall, we don’t see a bubble because the next stage will be the democratization of AI.”
Lenovo acknowledged that higher memory costs could drive up consumer electronics prices in coming quarters, noting that AI-related spending had already weighed on its recent profits, and that the additional costs were partially offsetting stable PC and device sales.
Despite that, Lenovo said it aims to maintain sales momentum and avoid passing on rising component prices directly to consumers whenever possible.
Other companies, including Xiaomi, have warned that smartphone buyers could face price increases next year due to the same supply constraints.
That said, Lenovo’s latest financial results showed revenue growth and adjusted earnings improving, even as its stock remains lower for the year.
However, semiconductor manufacturers expect AI-driven demand to continue shifting production priorities, which could keep supplies of traditional memory products limited.
Via Bloomberg
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