As AI demand drives chip shortages, HP battles soaring memory costs with supplier deals, new sourcing strategies and inventory moves to stabilise its PC business.
HP Inc. is taking multiple steps to address sharply rising memory chip prices, which executives say have doubled in recent months and are expected to climb further. According to a report by Supply Chain Dive, the company is leveraging long-term supplier agreements, expanding its sourcing pool and building strategic inventory positions to secure supply for fiscal 2026.
Chief Financial Officer Karen Parkhill told investors that initiatives are focused on securing supply, shaping demand, adjusting product configurations, implementing cost reductions and taking pricing actions. Interim Chief Executive Bruce Broussard added that long-term agreements are being signed to cover memory requirements, alongside qualifying new suppliers and strengthening inventory positions for key platforms.
HP has also cut the time required to qualify new materials by half, enabling faster product configuration changes. Additional measures include expanding lower-cost sourcing across commodities, reducing logistics expenses through AI-enabled planning, and working closely with channel and direct customers on targeted pricing actions.
Executives at HP explained that memory and storage components had risen to account for about 35 per cent of the company’s PC bill of materials, nearly double the proportion recorded in late 2025.
Parkhill indicated that memory costs had already increased by around 100 per cent sequentially and were expected to rise further as the fiscal year progressed.
HP’s challenges reflect wider industry pressures. Dell, Hewlett Packard Enterprise, and Lenovo have all raised prices in response to rising component costs, while cloud providers and developers continue to purchase large volumes of memory and storage to support AI data centre expansion.
By combining supplier relationships, sourcing diversification and inventory strategies, HP aims to mitigate the impact of escalating costs while maintaining flexibility in its product portfolio.
