HP Inc. Reports RAM Costs Now 35% of PC Materials

HP Inc. reported during its Q1 2026 earnings call that system RAM now accounts for approximately 35% of its PC bill of materials. This is a sharp increase from the previous quarter's range of 15% to 18%. The company attributes this cost surge to a global DRAM shortage caused by extraordinary demand from cloud providers, data center operators, and AI companies scaling server memory for training and inference workloads.

HP Inc. warned that these rising component costs could push Personal Systems Operating Profit margins below long-term targets. To counteract these headwinds, the company is increasing consumer prices, securing long-term supply agreements, qualifying new suppliers, and implementing company-wide cost actions. The company noted that high system prices combined with a sluggish PC market could potentially soften consumer demand.

Despite the pricing pressure, the personal systems division saw year-over-year revenue rise 11% to $10.3 billion. This growth was driven by Windows 11 adoption and the demand for AI PCs, which now represent 35% of the company's sales.