Headline & intro
RAM was always the boring line item in a PC spec sheet; now it’s the line item that can break the business model. HP says memory has exploded from under a fifth to more than a third of the cost of building many of its PCs. That’s not a minor fluctuation—it’s a structural shock to how computers are designed, priced, and sold.
In this piece, we’ll unpack what HP’s numbers really mean, who’s likely to win or lose from the current RAM crunch, how this intersects with the AI PC hype cycle, and why European buyers in particular should pay attention before they commit to their next laptop refresh.
The news in brief
According to Ars Technica, citing HP’s Q1 2026 earnings call and a transcript from Seeking Alpha, HP’s CFO said that RAM has gone from roughly 15–18 percent of the bill of materials (BOM) for its PCs in fiscal Q4 2025 to about 35 percent for the rest of the current fiscal year.
HP attributes this to a severe memory shortage. The company reports that DRAM costs have about doubled quarter‑over‑quarter and expects further increases as the year progresses. It also highlighted rising NAND prices.
HP warned that its total addressable market for PCs is set to shrink by double digits in 2026 as higher prices suppress demand. To protect margins, HP has raised PC prices, introduced configurations with less memory, and pushed more lower‑feature, lower‑cost models. The company is also leaning on long‑term supply agreements, adding new suppliers, accelerating qualification of new components, and using AI-based logistics planning to manage volatility.
Why this matters
Memory moving from ~17 percent to ~35 percent of BOM is not just an accounting curiosity; it reshapes the PC value stack.
First, it devalues everything else in the box. When a single commodity component suddenly eats more than a third of your cost, there’s less room for nicer displays, better keyboards, quality materials, or discrete GPUs—especially in the mainstream and education segments. The user experience risks being sacrificed to keep sticker prices vaguely acceptable.
Second, it incentivises under‑provisioned RAM. HP openly acknowledges promoting lower‑memory configurations. That’s rational from a margin standpoint but terrible for longevity. We’ve been here before: 4 GB Windows laptops sold into schools and SMEs that were effectively slow from day one and unusable after a couple of OS updates. In 2026, shipping 8 GB in a “modern” Windows 11 or AI‑branded PC is asking for the same story to repeat.
Third, it shifts power in the supply chain. OEMs like HP and Dell lose leverage when a small club of memory manufacturers—Samsung, SK hynix, Micron—control a component that has suddenly doubled in price. Long‑term agreements help, but they also lock in exposure. The real winners right now are upstream memory vendors, not PC brands.
Finally, it accelerates the pivot to services. HP notes that a third of Personal Systems margin already comes from non‑RAM categories like services and peripherals. As hardware margins get squeezed by RAM, expect more subscription add‑ons, managed device offerings, and aggressive bundling of software and support.
The bigger picture
The current RAM shock doesn’t exist in a vacuum; it sits on top of several converging industry trends.
1. AI is indirectly eating commodity memory. The most visible memory crunch is around high‑bandwidth memory (HBM) for GPUs powering generative AI. But that demand spills over. Foundries and DRAM makers prioritise high‑margin HBM and server‑class memory, tightening supply for PC‑grade DRAM and pushing up prices. Cloud and hyperscale buyers are less price‑sensitive than PC OEMs, so the latter lose the bidding war.
2. Memory markets are famously cyclical—but this cycle is different. We saw painful DRAM price spikes around 2017–2018 as well. Historically, high prices triggered a capacity boom, which then crashed prices a couple of years later. This time, adding capacity is more complex and capital‑intensive because vendors must serve very different segments: HBM for AI accelerators, LPDDR for phones and ultra‑portables, and DDR5 for PCs and servers. Balancing those lines slows the usual boom‑and‑bust correction.
3. The AI PC marketing wave needs more RAM, not less. Microsoft’s Copilot+ PC narrative, on‑device models, and heavier background services all assume RAM is plentiful. In reality, OEMs are being pushed in the opposite direction by costs. The risk: we end up with “AI PCs” that technically meet branding requirements but feel sluggish in daily use because they’re starved of memory.
4. History says consumers pay the price twice. Once at checkout, through 15–20 percent higher PC prices that analysts have warned about, and again through reduced lifespan. A laptop that feels constrained after two years is more likely to be replaced rather than upgraded—especially if the RAM is soldered. That’s good for unit sales in the short term, but terrible for sustainability and total cost of ownership.
For competitors, the dynamics are similar. Dell, Lenovo, Acer, and others face the same input costs. The competition shifts from who can buy cheapest to who can design the least compromised system—and who can best monetise services around it.
The European / regional angle
For European buyers, this RAM shock lands in an already difficult environment of high energy costs, sticky inflation, and tight public IT budgets.
Education systems in the EU, which often buy large fleets of low‑ to mid‑range laptops, are particularly exposed. A 15–20 percent price jump can mean fewer devices for students—or acceptance of lower‑RAM models that will struggle with increasingly heavy web apps and remote‑learning platforms.
There’s also a regulatory tension here. The EU’s sustainability and ecodesign agenda, plus the growing right‑to‑repair movement, implicitly assumes devices will be usable longer and upgraded when possible. Yet many consumer and business laptops have soldered memory. Combine non‑upgradeable RAM with today’s high prices and tomorrow’s heavier software, and you create exactly the kind of premature obsolescence Brussels wants to curb.
Privacy‑conscious European organisations face another trade‑off. Running more AI workloads locally, rather than sending data to US‑hosted clouds, is attractive under GDPR and the upcoming EU AI Act. But local inference is memory‑hungry. If RAM is both expensive and non‑upgradeable, the practical ability to keep data on‑device shrinks.
Finally, Europe has a strong refurbishing and second‑hand PC market. Persistent high RAM prices may actually benefit refurb players that can cheaply add memory to older, upgradeable desktops and laptops and sell them into cost‑sensitive regions in Southern and Eastern Europe.
Looking ahead
What should we expect next? Memory markets do eventually rebalance, but not on a consumer‑friendly schedule.
As HP itself signals, volatility could last well into its 2027 fiscal year. High prices encourage DRAM makers to expand capacity, but those fabs and process upgrades take years, not quarters. In the meantime, AI servers will likely continue to command priority access.
On the PC side, watch for three things:
- Spec games in the mid‑range. Expect more models that technically tick OS requirement boxes—say 8 GB of RAM—but feel compromised under real‑world loads. Marketing may lean harder on SSD size, design, or AI branding to distract from memory.
- More segmentation between consumer and business lines. Enterprises may insist on 16–32 GB as a standard, absorbing higher prices in exchange for longer lifecycles. Consumers will be pushed toward flashy but lean machines.
- Policy and procurement reactions in Europe. Public tenders may start to codify minimum RAM and upgradability requirements to avoid buying short‑lived devices, especially in education.
For individual buyers, the pragmatic advice is simple: if you must buy in the next 12 months, prioritise RAM and upgradability over almost everything else. A cheaper CPU with 16 GB of memory will age better than a fast CPU with 8 GB that you can’t upgrade.
The big open question is whether OEMs use this shock to rethink design—socketed RAM, longer support, clearer lifecycle promises—or double down on sealed, disposable hardware and services revenue.
The bottom line
HP’s revelation that RAM now eats around 35 percent of its PC BOM is a warning light for the entire industry. A supposedly commoditised component has become the tail that wags the dog, distorting designs, pricing, and even AI roadmaps. The winners, for now, are memory makers and service divisions; the losers are users stuck with overpriced, under‑equipped machines.
As a buyer, will you reward vendors that give you sufficient, upgradeable memory—even at a higher upfront price—or accept the lure of cheaper laptops that may hit a performance wall far too soon?
