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In an illustration of the severity of the current memory shortage, HP Inc. CFO Karen Parkhill said that RAM has gone from accounting for “roughly 15 percent to 18 percent” of HP PCs’ bill of materials in its fiscal Q4 2025 to “roughly 35 percent” for the rest of the year.

Parkhill was speaking during HP’s Q1 2026 earnings call, where the company said it expects the total addressable market for its Personal Systems business to decline by double digits this calendar year, as higher prices hurt customer demand.

“We have seen memory costs increase roughly 100 percent sequentially, and we do forecast that to further increase as we move into the fiscal year,” Parkhill said, per a transcript of the call by Seeking Alpha.

HP expects its financials to be most severely impacted by the RAM shortage in the second half of its fiscal year.

“We are seeing increased input costs driven primarily by the rising prices of DRAM and NAND,” Bruce Broussard, HP’s interim CEO and director, said. “We expect this volatility to remain throughout fiscal [year 2026] and likely into fiscal [year 2027].”

RAM shortage drives higher prices, lower specs

HP’s CFO noted that a third of the margin for HP’s Personal Systems business comes from non-RAM-related categories, including IT services and peripherals. However, HP has also raised PC prices to keep making money while paying significantly more for RAM.

Like other OEMs, HP has been trying to get customers interested in PCs with lower RAM specs to meet demand without depleting its limited and expensive memory supply. Analysts this year have warned about PC price hikes in the 15 to 20 percent range, as well as leaner RAM specifications on low- to mid-tier configurations.

“We also want to leverage part of our broad portfolio with silicon diversity so that we can offer different choices to customers in order to ensure how we do the demand-supply equation matching and also introduce low memory configurations,” Ketan Patel, president of HP’s Personal Systems business, said. The executive also pointed to releasing cheaper products that have fewer features.

Another strategy HP has employed to protect its profits is to leverage long-term agreements to maintain its “supply coverage,” Patel said during the call.

Broussard said that to mitigate the impacts of the memory shortage, HP has added new suppliers and cut “the time to qualify new material in half to accelerate our product configuration changes.” He added that HP has also lowered its logistics costs with AI-driven “end-to-end planning processes.”

HP’s Personal Systems business reported an 11 percent year-over-year (YoY) increase in revenue for the quarter at $10.3 billion. Consumer PC unit sales increased 14 percent YoY, while business PC unit sales increased 11 percent YoY.