Before the U.S. stock market opened on Thursday, the computer hardware sector was under pressure, with Dell and HP leading the decline. The market's concern is not about a shortage of CPUs or GPUs, but rather the more basic components—memory and storage—that are driving up the cost of entire systems.
Pre-Market Trends: Dell's Decline Deepens, HP Weakens
In pre-market trading, Dell Technologies fell over 4%, and HP dropped over 3%. Investors perceive that short-term pricing and configuration strategies by hardware manufacturers may have a greater impact on demand pacing than new product launches.
Cost Pressure: Memory and Storage Prices Said to Rise 40%–70% Over the Year
Industry opinions suggest that from the first to the fourth quarter of 2025, the cumulative cost increase for mainstream PC memory and storage is about 40% to 70%, with a significant portion being passed on to end consumers. This implies that even if manufacturers keep prices unchanged, their profit margins will continue to be squeezed.
Supply Changes: HBM and Server DRAM Draw Capacity
The core tension lies in "capacity allocation." Memory manufacturers prefer to allocate resources to higher-margin server-grade DRAM and HBM (High Bandwidth Memory), needed for AI infrastructure, causing a temporary shortage in the DDR memory commonly used in laptops and desktops. Similar structural pressure has been attributed to the rapid expansion of AI data center demand in several industry reports.
Manufacturers' Dilemma: Raise Prices or Lower Configurations
For large OEMs like Dell and Lenovo, strategy options are limited:
- Option One: Absorb higher bill of materials (BOM) costs and raise prices to "protect margins";
- Option Two: Stabilize prices as much as possible but compromise on configurations like memory/storage, reducing specifications for some models.
Both options introduce friction to demand: the former raises the purchase threshold, and the latter weakens product appeal.
Demand Outlook: IDC Says a 9% Drop Could Reduce 2026 Shipments to 260 Million Units
IDC research manager Jitesh Ubrani noted that if PC shipments drop by 9% in 2026, total shipments could fall to about 260 million units, slightly below the roughly 263.3 million units in 2024 and approaching 2023 levels. He described 2023 as one of the "worst years in PC history." With rising costs and tight supplies, the market worries that the "lower volume, higher price" pattern may become more pronounced.
