PC component costs are rising sharply due to high demand for AI infrastructure, with RAM pricing seeing a particularly steep increase. HP reported that memory now accounts for 35% of a PC’s overall bill of materials, a significant jump from 15% to 18% in the previous quarter.
CFO Karen Parkhill disclosed these figures during HP’s latest earnings call. She confirmed that the company plans to offset these rising costs with price increases. “We did share last quarter that memory and storage costs made up roughly 15 percent to 18 percent of our PC bill of materials, and we now currently estimate this to be roughly 35 percent for the year,” Parkhill said. Samsung has issued similar warnings regarding potential price hikes caused by AI-induced memory shortages.
HP is taking steps to mitigate the supply constraints. Interim CEO Bruce Broussard stated that while he believes the “market will rationalize over time,” the company is actively adding new suppliers and expanding its sourcing of lower-cost memory options. “We believe the market will rationalize over time,” Broussard said, noting the company’s efforts to diversify its supply chain.
Despite the rising costs, HP is experiencing strong demand for AI-enabled computers. The company reported that 35% of its PC sales now come from AI PCs. This positive trend for HP contrasts with statements from Dell, which recently suggested that consumers are largely indifferent to AI PCs. The industry is seeing mixed signals regarding consumer appetite for these new devices.
The broader semiconductor market is facing similar pressures. Memory manufacturer Micron has discontinued its consumer brands to focus entirely on B2B memory supply. Additionally, other critical components, including GPUs, are also facing supply shortages driven by the booming AI sector.
