In early 2026, businesses around the world have started to notice something unusual when ordering IT equipment: prices are suddenly much higher than they were just a year ago. Major technology vendors have increased the cost of laptops, servers, and other hardware by roughly 15–20%, creating an unexpected strain on IT budgets across many industries [1].
The reason isn’t traditional inflation or currency fluctuations alone. Instead, the biggest driver is a global shortage of memory chips, caused largely by explosive demand from artificial intelligence (AI) infrastructure. Data centres supporting AI systems require massive amounts of advanced memory components, and manufacturers are prioritising these high-margin orders. As a result, the supply available for everyday business hardware has shrunk dramatically [2].
For organisations in South Yorkshire, especially SMEs in sectors like advanced manufacturing, digital and creative industries, retail, hospitality, healthcare, and education, this shift could have real consequences. Hardware refresh cycles may become more expensive, procurement timelines longer, and technology planning more complex.
Below we explore what’s happening, why prices are rising so sharply, and what local businesses can do to manage the impact.
The central issue is a global supply crunch for memory components, particularly DRAM and NAND flash chips. These components are essential for nearly every computing device, from laptops and smartphones to enterprise servers.
During 2025, large technology companies including OpenAI, Microsoft, and Google dramatically expanded their AI infrastructure. Training and running advanced AI models requires huge clusters of high-performance servers packed with memory and storage. Due to this, the demand for memory chips surged to unprecedented levels [2].
Chip manufacturers responded by redirecting production toward the most profitable markets, AI servers and data centre hardware. That decision left fewer chips available for standard IT equipment such as business PCs and general-purpose servers.
The effect on pricing has been dramatic. Some key DRAM components have increased more than 70% year-on-year, while certain high-performance memory parts have jumped by as much as 170% [1]. NAND flash storage, the technology behind SSDs, has also climbed significantly as suppliers prioritise lucrative AI contracts.
Industry executives have acknowledged the unusual speed of the increase. Dell’s chief operating officer Jeff Clarke noted in late 2025 that he had “never seen memory-chip costs rise this fast,” highlighting that the pressure is affecting virtually every product category [1].
Analysts describe the situation in simple terms: AI is consuming the world’s memory supply. Reports suggest that up to 70% of global memory production in 2026 will be used by AI data centres, leaving just 30% for all other devices combined [5].
This is not expected to be a short-term spike. Instead, many experts believe the shift represents a structural change in the technology supply chain. New semiconductor factories are being built, but most will not come online until 2027 or 2028. Until then, the global supply of memory will remain tight [3].
For businesses, the result is straightforward: hardware manufacturers are increasing prices to offset their rising component costs.
Nearly every major hardware manufacturer has adjusted pricing in response to the component shortage. While each company has taken a slightly different approach, the overall trend is clear.
Dell has been among the most aggressive in responding to the cost pressures. The company implemented 15–20% price increases on PCs and servers starting in December 2025 [1]. Customers who had received quotes earlier in the year discovered that orders scheduled for 2026 delivery were automatically repriced, often increasing by thousands of pounds for larger enterprise purchases.
Lenovo took a similarly decisive step by cancelling all outstanding hardware quotes and introducing new pricing from 1 January 2026 [1]. Internal estimates suggest the changes increased PC and server pricing by around 10–15%, with the possibility of further adjustments if component costs continue rising.
HP Inc. has adopted a more gradual strategy, with expected 5–10% increases across its PC line up in early 2026. However, the company has warned that memory now represents 15–18% of the cost of building a typical PC, compared with roughly 10% historically [1]. If memory prices continue climbing, additional increases may follow later in the year.
On the enterprise side, Hewlett Packard Enterprise (HPE) has raised prices on servers and storage platforms by roughly 10–15%, passing on higher DRAM costs to customers.
Networking giant Cisco has also introduced modest price increases on routers, switches, and wireless equipment. These adjustments are smaller because networking devices generally contain less memory than servers or workstations, but the company still cited rising component costs as the reason for the changes [6].
The trend extends beyond the largest vendors. Companies such as Acer, ASUS, Samsung, and LG have also raised prices across parts of their product ranges. Even niche products have been affected. The makers of the popular Raspberry Pi single-board computer increased prices by around 20% after years of stable pricing, citing the same global chip shortages.
In short, the entire hardware market is experiencing a pricing reset. Technology that organisations once assumed would gradually become cheaper is now temporarily becoming more expensive.
Although the price surge affects nearly every type of device, some categories are experiencing much steeper increases than others.
Servers, storage arrays, and high-end workstations are among the hardest hit products. These systems typically contain large quantities of RAM and high-speed storage, precisely the components facing the most severe shortages.
In many cases, enterprise server prices have risen 15–20% or more compared with 2025 levels. Businesses planning to deploy new database systems, virtualisation clusters, or high-performance computing environments may face significantly higher procurement costs.
Some organisations are responding by extending the life of existing servers through upgrades, such as adding additional RAM or replacing storage drives rather than purchasing entirely new hardware.
Standard office computers are also becoming more expensive, although the increases vary depending on configuration. A laptop that previously cost £1,000 may now cost £1,150–£1,200, reflecting typical vendor price increases.
The main factor is the rising cost of memory modules. Because RAM now accounts for a larger portion of the total system cost, manufacturers have limited ability to absorb the increases without raising prices [1].
Higher-spec machines are particularly affected. Configurations with 32 GB or more of memory can now cost hundreds of pounds more than last year, while top-end workstation builds are even more expensive [6].
As a result, many organisations are delaying refresh cycles or purchasing lower-spec systems to stay within budget.
Businesses that rely on powerful computing systems, such as design studios, engineering firms, and data science teams, are seeing some of the largest price increases.
Machines marketed as AI-ready laptops or workstations, which include high-end GPUs and large memory capacities, have experienced particularly sharp cost jumps. For example, some workstation models equipped with professional graphics cards have increased by several hundred pounds compared with previous pricing [6].
This has important implications for industries that rely on intensive computing power, including architecture, animation, video production, and advanced engineering.
Networking hardware has seen smaller but still noticeable price adjustments. Because switches and routers use less memory than servers or GPUs, the cost increases tend to be modest, typically a few percent [6].
However, longer lead times have become an issue. Supply chain disruptions and component shortages mean certain networking products can take longer to ship than in previous years.
Peripheral equipment such as printers, monitors, and accessories has not been affected as severely. However, prices are still creeping upward due to broader supply-chain pressures.
Consumer electronics have also seen similar trends. Smartphone manufacturers have warned that device prices may rise due to the same memory shortages affecting PCs and servers.
For small and medium-sized businesses across South Yorkshire, rising hardware costs could influence technology planning in several ways.
Manufacturing companies rely heavily on powerful workstations, industrial PCs, and specialised servers for design, simulation, and production control.
A 15–20% increase in hardware costs could cause firms to delay planned upgrades or extend equipment lifecycles. While this approach can reduce immediate expenses, it may also slow innovation if older systems struggle to run modern engineering software.
Manufacturers may increasingly look for incremental upgrades or financing options to maintain productivity without large upfront costs.
Tech startups, digital agencies, and creative studios depend on high-performance computers to produce content and develop software.
Higher hardware prices may force some firms to buy fewer devices, delay upgrades, or shift toward cloud-based infrastructure instead of maintaining local servers.
Leasing and device-as-a-service models may also become more attractive, allowing businesses to spread costs across predictable monthly payments.
Retail businesses rely on point-of-sale systems, back-office computers, and networking equipment.
Because margins in retail are often tight, even modest increases in technology costs can affect budgets. Some retailers may choose to buy refurbished devices or extend the lifespan of existing equipment to reduce expenses.
The market for refurbished IT hardware is already growing rapidly as organisations seek affordable alternatives during the shortage [7].
Restaurants, hotels, and tourism businesses increasingly rely on technology for booking systems, payment processing, and customer connectivity.
Higher hardware costs may slow upgrades to Wi-Fi networks, payment terminals, or digital ordering systems. Businesses may also see higher contract costs when renewing managed IT services that include hardware components.
Healthcare providers and educational institutions often operate with fixed or limited budgets.
Price increases may force these organisations to delay device refresh projects or purchase fewer systems than originally planned. In some cases, refurbished equipment or grant funding may help fill the gap.
However, delaying critical upgrades can introduce security and reliability risks, particularly in environments handling sensitive data.
While the situation may feel challenging, there are several steps organisations can take to manage the impact of rising hardware prices.
Businesses should assume that hardware costs will remain higher throughout 2026. Planning for 15–20% higher prices can help prevent unexpected budget shortfalls.
Focus spending on systems that directly affect productivity, security, or compliance. Less urgent upgrades can potentially wait until supply conditions improve.
Because vendors are shortening quote validity periods, ordering equipment earlier can help lock in current pricing before further increases occur [1].
Upgrading RAM or storage can extend the useful life of existing devices and delay expensive replacements.
Certified refurbished hardware can offer strong performance at a lower cost. Demand for these devices is rising as businesses look for ways to reduce spending during the shortage [7].
Operational expense models. such as hardware leasing or cloud services, can reduce large upfront purchases and provide more predictable costs.
Technology providers can help identify alternative solutions, source equipment through specialist supply channels, and prioritise upgrades that deliver the most value.
The current hardware price surge highlights how quickly global technology trends can affect everyday business operations. The rapid expansion of AI infrastructure has reshaped the semiconductor supply chain, pushing memory chips toward data centres and away from traditional computing devices.
Until new manufacturing capacity comes online in the next few years, businesses may need to operate in a world where hardware is temporarily more expensive and sometimes harder to obtain.
However, with careful planning, flexible procurement strategies, and the right technology partners, SMEs across South Yorkshire can still modernise their IT infrastructure and continue growing despite the changing market conditions.
Sources:
AI use: Microsoft Copilot in Researcher mode used for initial research and to find sources. Subject, structure, areas of focus, editing and final version by Alex Hodgson.