Higher memory prices to hit PC shipments

COST PRESSURE: Global PC brands such as HP Inc are expected to cope with the situation by either raising prices or downgrading their products, a researcher said Global PC shipments are expected to grow by a mere 0.3 percent to about 180 million units next year, as a surge in memory prices has added cost pressure on manufacturers, the Market Intelligence and Consulting Institute (MIC) said at a news conference in Taipei yesterday.As major memorychip suppliers such as Samsung Electronics Co and Micron Technology Inc shift resources and production capacity toward high-bandwidth memory, which is used primarily in servers and offers higher margins, the supply of low-power DRAM used in PCs and smartphones has been squeezed, tightening supply-demand conditions and pushing up prices, MIC ICT Industry Research Center deputy director Chris Wei (魏傳虔) said.The memory price surge is expected to extend into the first quarter of next year, Wei said.Whether the situation persists would depend on memory suppliers adjusting capacity allocations or PC brands renegotiating contracts with memorychip makers, he said.As long as memorychip makers continue to prioritize enterprise and server products, it would be difficult to shift capacity back to the consumer segment, a situation that is expected to keep supplies tight and prices elevated for some time, he added. PC brands are expected to cope with the situation by either raising prices or downgrading their products, Wei said.Dell Technologies Inc, HP Inc, Acer Inc (宏碁) and Asustek Computer Inc (華碩) are reportedly considering price increases.While some other brands might opt to downgrade their products to absorb higher costs, this strategy is unlikely to be widely adopted for mainstream PCs, as most models do not necessarily have enough room for future memory upgrades, Wei said.As for resource allocation, PC brands are likely to prioritize limited memory supplies for higher-margin or more stable product lines such as gaming and commercial PCs, he said.Entry-level and consumer models, which carry lower margins, are more likely to face price increases or product downgrades, he added.Brands with a higher share of commercial products are also likely to have greater negotiating leverage, as the segment has more stable shipments and customer relationships, resulting in more stable contract pricing, Wei said.In contrast, products that rely more heavily on the consumer market are expected to bear the brunt of the impact, he said.Bloomberg News reported that Apple Inc plans to launch a more affordable MacBook model in the first half of next year, equipped with its A18 Pro processor, which is currently used in iPhones, Wei said.The move, combined with rising memory prices, could add further pressure to PC brands’ pricing strategies next year, he said.