Memory crunch sends PC prices into double-digit climb

The average prices of notebooks and desktops are up in Europe by double-digit percentages on the back of tightening availability of memory. All PC makers are battling with shortages of DRAM and NAND as component manufacturers prioritize production for higher-margin high-bandwidth memory chips used in AI servers. The cost of memory has more than quadrupled in 12 months. Analyst Context, which tracks the products that wholesalers and resellers ship to customers, says that average notebook prices climbed 11.4 percent year-on-year and desktop prices rose 10.5 percent via European distribution in the first six weeks of calendar Q2. The revenue generated from the sales went up 12 percent for mobile PCs and 2 percent for desktop machines. This is despite unit sales shrinking 3 percent for laptops and 7 percent for desktops. "After a strong first quarter where unit and revenue growth was fueled by channel stocking ahead of anticipated price hikes, the dynamic shifted sharply at the start of Q2," said Marie-Christine Pygott, senior analyst. "Unit volumes dropped following that period of intense stocking, but revenues continued to climb, albeit at a more moderate pace, driven by a significant rise in average selling prices and a market shift toward higher-end devices." End user customers had pulled forward purchases in Q1 to avoid the expected price hikes, which are forecast to keep heading upward for at least the remainder of this year, and likely into next amid the relentless build-out of AI datacenters. Just as memory makers are funneling production capacity toward higher-margin chips, PC manufacturers are also looking to squeeze the most out of the supply chain by concentrating on premium notebooks and desktops. Lenovo last week spoke of "improving profitability" in the current climate, and Dell chief operating officer Jeff Clarke this week said the supply challenge is something the corporation is "spending a tremendous amount of time on." "If you look at what is happening in the semiconductor network, you are seeing utilization of the trailing nodes beginning to fill at greater rates, leading edge nodes stuff is fully is fully allocated. Lead times are a year. So all of those are pressured, but the most pressure comes across the four that I described in the first three primarily. DRAM, NAND, CPUs, then hard drives, and then ultimately the basket of goods that sit around that." "Our supply chain has clearly worked through this. This is what we do, never run out of parts," he added. "We have our work cut out for us to work with our partners to drive more supply and every bit and byte matters. Every microprocessor matters." During an earnings call on Wednesday, HP CEO and interim director Bruce Broussard said the company had mitigated higher input costs. "We took deliberate actions to lower our memory cost by accelerating product reconfiguration and qualifying lower-cost components. We optimized the use of lower-cost inventory on hand while shaping demand to higher-margin units. And lastly, we took action to reprice for commodity increases. Together, these actions had a meaningful impact on our operating profit in the quarter, enabling us to deliver results above expectations." Analysts previously warned that sub-$500 laptops may disappear in 2026 as vendors are unable or unwilling to make products at those prices. Context reckons Apple's MacBook Neo, its entry-tier product - entry tier for Apple anyway - accounted for a third of Apple notebook sales in Europe, "matching the MacBook Air share within Apple's notebook mix." (R)