Tech Giants Struggle as Memory Prices Skyrocket
Memory and Storage Prices Skyrocket
The tech world is facing a significant challenge as memory and storage parts become increasingly expensive. This trend is good news for companies like Sandisk, Micron, and Western Digital, whose stocks are soaring. However, for companies like Apple, HP, and Dell, the situation is far from ideal.
A Tight Spot for Tech Giants
These tech giants are caught in a difficult position. They can either:
- Lower their profits
- Raise prices
Both options come with risks:
- Lowering profits might displease investors.
- Raising prices could lead to reduced customer demand.
The Demand for Memory
The high demand for memory is causing a severe shortage, which experts believe will persist for some time. This is particularly concerning for companies producing smartphones and computers.
Stock Performance
- Apple's shares rose only 8.6% in 2025, their worst performance since 2022.
- HP's shares lost nearly a third of their value in 2025.
- Dell's shares have dropped 26% since October.
Winners and Losers
On the other hand, memory and storage companies are thriving:
- Sandisk is leading the S&P 500.
- Western Digital and Micron are also among the top performers.
- Samsung's profits more than tripled due to higher memory prices.
Long-Term Impact
This is not just a short-term issue. Memory costs can make up 10% to 20% of a device's total cost, indicating that the problem is here to stay.
Companies Feeling the Heat
- HP expects memory costs to cut their profits by 30 cents per share.
- Dell is faring better due to their server business but is still affected.
Expert Predictions
Experts predict that this problem will last for the next two years. Memory prices are cyclical, but the current shortage is severe, and it's unclear when things will return to normal.
