The Rising Cost of RAM: Insights from HP’s Earnings Call
HP has recently highlighted a significant change in the economics of PC manufacturing, particularly emphasizing the soaring costs of system RAM. During their Q1 2026 earnings call, HP revealed a startling fact: RAM now constitutes 35% of the total cost to produce a PC. This is a considerable jump from the previous range of 15% to 18%, effectively doubling the budget allocation for memory.
The Register reported on this revelation, noting that the cost of memory has dramatically impacted PC production budgets. Such a surge is unsurprising for industry watchers who have observed overall RAM price increases, especially with the emergence of DDR5 memory models, which have contributed to higher consumer prices.
Long-term Supply Strategies and RAM Costs
Bruce Broussard, HP’s interim CEO, explained that despite these rising costs, the company has implemented long-term supply contracts for 2026. In an effort to stabilize operations, HP has also “qualified new suppliers and built strategic inventory positions for key platforms.” This approach includes efforts to expedite the qualification of new materials, aiming to enhance product configuration changes while managing supply constraints.
The stark increase in RAM costs is a significant concern, especially for a company like HP, which is the second-largest PC manufacturer globally. With its extensive resources and inventory, the company still finds itself navigating challenges related to memory pricing. Notably, competitors like Lenovo have also expressed concerns about impending price hikes driven by memory costs.
Exploring New Suppliers and Future Implications
Interestingly, HP’s focus on new suppliers may indicate a shift toward more affordable alternatives, particularly from Chinese manufacturers. For instance, the influx of memory modules from companies like CXMT may be a potential solution to mitigate stock supply issues. However, speculation remains about the effectiveness of such strategies.
Broussard’s comments regarding product configuration and demand shaping hint that HP may consider introducing models with reduced RAM to align better with budget constraints. This could lead to more consumer-friendly pricing, although it may compromise the longevity and performance expectations of their offerings.
The ramifications of this RAM crisis are far-reaching, impacting PC manufacturers and consumers alike. It is an undeniable reality that the inflated costs of RAM have created tumultuous conditions in the cutthroat tech industry, influencing both product pricing and availability.
The best laptops for all budgets
Our top picks, based on real-world testing and comparisons
For more details about the increasing RAM costs and the effects on PC production, visit Here.
Image Credit: www.techradar.com
