HP’s CEO says rising memory costs will soon make the company raise prices and offer products with less powerful configurations.
During an earnings call on Tuesday, Enrique Lores talked about rising memory costs which have pushed DDR5 RAM prices up by more than 200% in recent weeks. He said HP has a stockpile of memory, so he expects the company to lessen the impact of these costs. In the first half of our fiscal year, which began this month.
However, starting in May, higher memory costs will start to reduce HP’s PC product margins, so the company will need to respond. Lores said they include:
- qualifying lower-cost suppliers
- redesigning the portfolio to reduce memory configurations
- accelerating our AI-enabled transformation to drive further cost savings
- raising prices in close partnerships with our channel and direct customers
At the end of the call, HP’s CEO added: “What we have seen in the past in these situations, from a demand perspective, is usually the more low-end categories, those that are impacted.”
The company also plans to raise prices only as needed, depending on the country and product category.
Other smaller PC makers are also warning about price increases. CyberPower PC will raise prices on Dec. 7. MainGear is telling customers to buy PCs and parts now before prices are expected to go up after Black Friday sales.
The memory shortage is being blamed on high demand from AI data centers, which is reducing the supply of RAM and SSDs. The shortage is especially worrying because it could last for years if demand for AI stays high.
This month, the CEO of Fashion, a major supplier of SSD controllers, warned that electronics makers might cut storage capacity in their products by up to 50% because of the shortage. Meanwhile, Lenovo has been stockpiling memory, and experts have expected to have enough to last through 2026
Source: HP to Raise Prices, Lower Configurations Due to Surging Memory Costs
