HP Inc. just reported its first fiscal quarter of 2026, showing an 11% year-over-year jump in Personal Systems revenue to $10.3 billion and a 12% growth in PC units shipped. But the real story is that memory inflation is now reshaping the economics of hardware, with HP warning that surging DRAM (Dynamic Random Access Memory) and NAND (non-volatile flash memory) costs, along with US trade regulations, are pressuring margins and weighing on its full-year outlook.
In its latest results, HP disclosed that memory, which in the prior quarter made up roughly 15% to 18% of a PC bill of materials (BOM), has climbed to about 35% of the total PC cost structure, effectively doubling its weight in the BOM and compressing operating income.
HP’s non-GAAP operating margin dipped even as revenue and unit volumes climbed, underscoring that component cost pressure is now powerful enough to overpower a strong Windows 11 and AI PC refresh cycle. That is the context in which every ITAD provider, repair operation, and component broker now has to make strategic decisions.
Reviewing HP’s results and statements from Lenovo indicates that this is not a modest, cyclical uptick. Industry coverage has described the situation as a “RAM crisis,” noting that memory has become the single largest cost line item in many systems, and that DRAM pricing has moved so sharply that it is altering product configurations, price positioning and profitability.
For operators that live and die on spreads between used, harvested, and new components, the idea that more than a third of a new PC’s cost is tied up in memory reframes how they should think about every decommissioned device.
Lenovo is sending the same signal from a different angle. Public statements from senior Lenovo executives emphasize the need for partners to be disciplined around pricing and ordering as the company navigates volatile memory costs. It has told the market to prepare for March RAM price hikes while stating bluntly that there is “no way around” higher memory pricing in the near term. When two of the world’s largest PC vendors both highlight memory as a central risk to forecasts and channel performance, operators in the PC disposition sector that rely on the component market should treat that as structural rather than transient.
In the short term, the risks for ITAD firms and adjacent sectors like repair shops are operational and commercial. For instance, replacement part cost inflation can erode the economics of extended warranty work, depot repair, and low-margin device refurbishment, especially when customers expect pre-crisis pricing on service contracts signed months or years ago.
Then, OEM and channel behavior may reduce the flow of harvestable memory into secondary markets, as vendors stretch asset lives internally or aggressively redeploy pulled modules into warranty and field stock. Third, volatility complicates pricing models: Operators that quote buyout prices or revenue-share assumptions based on last quarter’s DRAM spot pricing can quickly find themselves upside down if the market jumps again before resale.
Value window for secondary component supply
At the same time, the same conditions that are hurting OEM margins are creating a value window for those who control secondary component supply. When memory accounts for 35% of a new system’s cost, the relative attractiveness of tested, warrantied, used DRAM and SSDs improves significantly for cost-sensitive enterprises, regional system builders, and large refurbishers.
Rising list prices from HP and Lenovo on new configurations, driven by more expensive RAM, give ITADs and brokers room to capture higher absolute dollars per harvested module, provided they can prove quality and traceability.
The longer-term question is whether this environment becomes the catalyst that pushes components reuse and harvesting from opportunistic to strategic. Research on electronic components reuse and recycling points to a global market measured in the tens of billions of dollars annually, with expectations for solid growth through the next decade, driven by e-waste volume, raw material scarcity, and regulations. As memory and other critical components get more expensive, OEMs and large IT asset owners have a stronger economic incentive to design programs that systematically recover and redeploy high-value components rather than treating them as scrap.
Path forward
For the ITAD industry, the path forward is to lean into component-level recovery and remarketing rather than relying on whole-device resale or commodity shredding, as declining commodity pricing and lightweighting have already forced operators to rethink models and prepare customers for invoices instead of checks. The current memory market amplifies that shift by widening the gap between commodity value and tested component value, rewarding those who invest in testing, serialization and data to sell individual modules into trusted channels.
At the same time, higher OEM configuration prices strengthen the case for upgrades and life extension on existing fleets, supporting labor-intensive services such as board-level troubleshooting, cross-grading memory and performance-focused service level agreements (SLAs), while brokers that can interpret OEM signals, secure diversified supply from ITAD streams and deliver predictable quality are best placed to turn short-term volatility and counterparty risk into premium spreads and, over time, evolve from opportunistic traders into embedded supply partners.
This worsening memory environment is clearly squeezing OEM margins. It is also revaluing the contents of every retired server and notebook, and it is setting up a market where the most sophisticated ITADs, repair operations, and brokers can turn volatility into durable advantage if they are willing to operate at the component level, not merely at the device or scrap level.es and life extension on existing fleets, supporting labor-intensive services such as board-level troubleshooting, cross-grading memory and performance-focused service level agreements (SLAs), while brokers that can interpret OEM signals, secure diversified supply from ITAD streams and deliver predictable quality are best placed to turn short-term volatility and counterparty risk into premium spreads and, over time, evolve from opportunistic traders into embedded supply partners.
This worsening memory environment is clearly squeezing OEM margins. It is also revaluing the contents of every retired server and notebook, and it is setting up a market where the most sophisticated ITADs, repair operations, and brokers can turn volatility into durable advantage if they are willing to operate at the component level, not merely at the device or scrap level.
