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We knew it was coming, but HP has confirmed that the extraordinary memory crisis is significantly affecting the cost of building its laptops. RAM now accounts for 35% of a laptop's build cost.
"We did share last quarter that memory and storage costs made up roughly 15 percent to 18 percent of our PC bill of materials, and we now currently estimate this to be roughly 35 percent for the year," said CFO Karen Parkhill in the company's most recent earnings call. Parkhill confirmed that price increases will be coming to combat the price increases.
Meanwhile, HP is trying to find new suppliers and lower-cost sourcing for RAM. It's a similar strategy to one Acer is taking in looking for smaller vendors that aren't the big three of Samsung, Micron and SK Hynix.
Surprisingly, HP execs also said that the company is seeing high demand for AI PCs, claiming that 35% of recent PC sales were AI ones. It's an interesting contradiction for Dell, whose head of product said customers don't care about AI PCs.
"What we've learned over the course of this year, especially from a consumer perspective, is they're not buying based on AI," Dell exec Kevin Terwilliger said before CES. "In fact, I think AI probably confuses them more than it helps them understand a specific outcome."
In the meantime, AI is eating up the supply of RAM and even affecting other computing components like GPUs and hard drives.
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