- HP says memory makes up about 35% of PC cost, up from 15-18% in a quarter
- The company and analysts expect volatility to continue for some time yet.
- HP’s consumer devices continue to sell strongly, but Canalys sees costly impacts
HP has revealed that the cost of memory now represents around a third (35%) of its PC bill of materials, up from 15-18% last quarter, which is a very sharp increase.
And worse yet, the company expects memory chip price volatility to continue well into next year, driven largely by demand for AI data center components, which is putting pressure on consumer supply.
Looking ahead, HP expects the percentage of RAM on the PC bill to increase before plateauing or declining, indicating potential knock-on price increases for consumers.
HP says computer memory is getting more expensive
To mitigate some of the price increases, HP has secured long-term supply agreements and qualified new suppliers to diversify its supply. And although the company blames AI for increasing costs, it is also using it in its supply chain planning to reduce costs in areas such as logistics.
The company is combining multiple approaches, including increasing bottom line costs and reconfiguring devices, to maintain healthy margins and not pass on such steep price increases to consumers.
HP interim CEO Bruce Broussard praised the strong performance of personal systems, including the “continued push for AI PCs.” The company posted a 6.9% year-over-year increase in quarterly revenue. Personal systems (PS) revenue increased 11%, with consumer PS revenue up 16% and commercial PS revenue up 9%.
HP isn’t alone in feeling the pressure, however, as the entire industry prepares to absorb or pass on rising costs. “Demand for conventional DRAM is rising alongside HBM as AI inference workloads surge, driving an exceptional near-term price rally,” noted Omdia senior principal analyst Lino Jeng.
A separate post from Omdia hints at a possible decline in the semiconductor market if AI had not stepped in and created such a surge.
Looking ahead, Omdia researchers predict that “supply-side pressures” and “cost increases will be passed on to customers” will continue following 40% to 70% increases in PC memory and storage costs throughout calendar 2025.
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