Memory Crisis Hits PC Makers Hard: HP Reveals DRAM Costs Have Doubled, Squeezing Profits and Raising Consumer Prices

In a stark revelation that underscores the growing severity of the global memory shortage, HP Inc.’s CFO Karen Parkhill disclosed that DRAM (Dynamic Random Access Memory) has skyrocketed from representing roughly 15 to 18 percent of the bill of materials for HP PCs in fiscal Q4 2025 to an eye-watering 35 percent for the remainder of the year. This dramatic cost surge is sending shockwaves through the tech industry, forcing manufacturers to make tough decisions that will inevitably impact consumers worldwide.

The announcement came during HP’s Q1 2026 earnings call, where the company painted a sobering picture of the months ahead. Parkhill revealed that memory costs have increased by approximately 100 percent sequentially, with further increases anticipated as the fiscal year progresses. This unprecedented price volatility is forcing HP to raise PC prices significantly, potentially dampening consumer demand in an already challenging market environment.

HP’s interim CEO and director Bruce Broussard emphasized that the company is experiencing increased input costs driven primarily by the surging prices of both DRAM and NAND flash memory. “We expect this volatility to remain throughout fiscal [year 2026] and likely into fiscal [year 2027],” Broussard warned, suggesting that consumers and businesses should brace for sustained higher prices on computing devices for the foreseeable future.

The financial impact on HP is particularly severe in the second half of its fiscal year, according to Parkhill. While the company has some cushion through non-RAM-related revenue streams—including IT services and peripherals, which account for about a third of the margin for its Personal Systems business—these buffers are proving insufficient to fully absorb the dramatic cost increases.

This crisis is not isolated to HP alone. The memory shortage is creating a ripple effect across the entire PC manufacturing ecosystem, with other major players like Dell, Lenovo, and Apple also grappling with similar cost pressures. Industry analysts suggest that the shortage stems from a perfect storm of factors, including supply chain disruptions, increased demand for memory in AI applications, automotive electronics, and data centers, as well as geopolitical tensions affecting semiconductor manufacturing.

The consequences for consumers are already becoming apparent. PC manufacturers are implementing multiple strategies to cope with the crisis: raising retail prices, reducing the amount of RAM included in base configurations, and in some cases, delaying product launches. Some budget-friendly laptop models that traditionally shipped with 8GB of RAM are now being configured with 4GB to maintain competitive pricing, potentially compromising user experience and future-proofing.

For businesses and consumers planning technology purchases in 2026, the message is clear: expect to pay more for less memory, or significantly more for the same specifications as in previous years. The memory shortage is also accelerating interest in alternative computing solutions, including cloud-based applications and ARM-based systems that may offer different performance characteristics at potentially better price points.

Industry experts are divided on when relief might come. Some predict that new fabrication facilities coming online in 2026 and 2027 could eventually ease the supply constraints, while others warn that the explosive growth in AI and machine learning applications could keep demand for high-performance memory at unprecedented levels for years to come.

HP’s candid disclosure serves as a wake-up call for the entire technology sector, highlighting the fragility of global supply chains and the cascading effects that component shortages can have on end-user pricing and product availability. As the situation evolves, both manufacturers and consumers will need to adapt to a new reality where memory—once considered a relatively inexpensive commodity—has become one of the most significant cost drivers in personal computing.

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