RAM now represents 35 percent of bill of materials for HP PCs

In a stark revelation regarding the ongoing memory crisis, HP Inc.'s CFO Karen Parkhill disclosed that the cost of RAM has surged dramatically. Once representing about 15 to 18 percent of HP PCs' bill of materials during fiscal Q4 2025, RAM now comprises roughly 35 percent for the remainder of the year. During HP’s Q1 2026 earnings call, Parkhill highlighted the challenging landscape ahead, predicting a significant decline in the total addressable market for the company's Personal Systems division. This downturn is attributed to escalating prices affecting customer demand. "We've observed a staggering 100 percent increase in memory costs sequentially, and we anticipate further hikes as we progress through the fiscal year," she stated, referencing insights from Seeking Alpha's call transcript. The ramifications of the RAM shortage are expected to hit HP's financial performance the hardest in the latter half of the fiscal year. Interim CEO Bruce Broussard noted, "Increased input costs are primarily driven by the soaring prices of DRAM and NAND. We foresee this volatility persisting into fiscal 2026 and potentially extending into 2027." While Parkhill mentioned that a significant portion of HP's Personal Systems profit margins comes from non-RAM segments, such as IT services and peripherals, the company has nonetheless opted to raise PC prices. This strategic move aims to offset the financial pressures from soaring RAM costs, enabling HP to maintain profitability amid a turbulent market environment.