Lenovo Stockpiles Memory Components as AI Boom Creates 'Unprecedented' Supply Squeeze

Lenovo Stockpiling PC Memory Due to 'Unprecedented' AI Squeeze

Lenovo Group Ltd. is stockpiling memory and other critical components to navigate a supply crunch brought on by the boom in artificial intelligence. The world's biggest PC maker is holding on to component inventories that are roughly 50% higher than usual, Chief Financial Officer Winston Cheng told Bloomberg TV on Monday. The frenzy to build and fill AI data centers with advanced hardware is raising prices for producers of consumer electronics, but Lenovo also sees opportunity in this to capitalize on its stockpile.

Lenovo 'Best At Navigating' Looming Memory Shortage: North American President

"These capacities have to be brought online years ago. You have to build these fabs and the energy for this, and the largest hyperscaler models from the largest names, which I won't mention but you know who they are, are all looking to make sure they have the ability to continue their infrastructure. And it has an impact across the entire ecosystem," Ryan McCurdy, Lenovo's senior vice president and president of North America, told CRN. While Lenovo saw record quarterly revenue, a healthy rise in infrastructure sales and continued dominance the PC category during its most recent quarter, the company is turning its full attention to mitigating the memory shortages it sees on the horizon, Lenovo executive Ryan McCurdy told CRN. "We like to think that we're going to be the best at navigating this," said McCurdy, Lenovo's senior vice president and president of North America. "But to do that, you have to be proactive, planning with your partners, with your customers. And this is something we're spending a disproportionate amount of time on, and I think it's going to dominate the narrative in the quarters to come." McCurdy said the market for DRAM and NAND memory are facing the largest supply-demand gap in the last decade, which is likely to lead to a systemic shortage coming across the industry, driven by the large hyperscalers. "It has a downstream effect on every device that uses hard drives and memory, and there's CPU elements to it, and it's all interconnected, and it's very exciting as a supply chain undergrad, but it's also the dominant feature today, and it's all part of that larger narrative," he said. McCurdy (pictured) said the industry is bracing for memory shortages from the data center to the smartphone, which could see DRAM and NAND prices double as device makers vie for time and space in a limited number of chip fabrication plants. "These capacities have to be brought online years ago," he said. "You have to build these fabs and the energy for this, and the largest hyperscalers' models from the largest names, which I won't mention but you know who they are, are all looking to make sure they have the ability to continue their infrastructure. And it has an impact across the entire ecosystem." McCurdy said Lenovo has built a dynamic supply chain that has demonstrated its ability to weather sudden shifts and unknowns, such as trade policy moves around tariffs and global geopolitics. "You've seen us do this over the last few years. We're winning. We have the supply chain. We have the relationships," he said. "Let's talk, let's plan. Let's make sure we navigate this next season." Lenovo's newest channel chief, Wade McFarland, took over 13 weeks ago. He said he has spent much of his time recently talking with distributors and leading partners about how Lenovo plans to mitigate the shortage the company sees on the horizon. "I think we are very well positioned with our partners, but again, I just go back to the way that we collaborate and the way that we're out on our front foot having these conversations before we get to those events, which I think we'll start to really probably see materialize at the beginning of the year," McFarland said. "So I think that's what's helpful, is just being on our front foot and being out there with our partners and navigating through these uncertain times that are heading our way." Lenovo last week reported record revenue of $20.4 billion, up 15 percent year over year for its second quarter in fiscal year 2025/26. Additionally, the company, which is publicly traded on the Hong Kong Stock Exchange, reported net income growth of 25 percent year over year to $512 million. The largest portion of Lenovo's sales, some $15.1 billion, came from its Intelligent Devices Group, which makes PCs, phones, tablets and peripheral devices. That unit grew revenue 12 percent, helped along by demand for AI PCs, which now account for 33 percent of all PC shipments, the company said. The company's infrastructure business notched $4.1 billion in sales, up 24 percent year on year as demand for the company's Neptune line of direct-to-chip liquid-cooled servers saw strong demand from cloud service providers, enterprise and the SMB.

Lenovo Has Relied on a "Massive" Inventory Buildout to Keep Prices Stable This Year, But Warns of Aggressive Hikes if Memory Shortages Persist Into 2026

Well, it appears that Lenovo has given PC gamers the signal not to worry for this year, but 2026 could prove to be troublesome if memory shortages continue at their current pace. The PC market is entering a 'difficult' period in the upcoming quarters, as the AI bandwagon is moving at a rapid pace, driving demand for memory products to a new high. End-solutions like HBM, DDR, LPDDR, and GDDR memory are entering into shortages, which is why vendors across the consumer supply chain are preparing for aggressive price increases. In a statement by Lenovo's CFO Winston Cheng, it is revealed that the manufacturer had already adjusted to memory shortages by acquiring massive inventory of its products upfront, to ensure that higher costs don't transfer to retailers and consumers. The world's biggest PC maker is holding on to component inventories that are roughly 50% higher than usual, Chief Financial Officer Winston Cheng told Bloomberg TV on Monday. The frenzy to build and fill AI data centers with advanced hardware is raising prices for producers of consumer electronics, but Lenovo also sees an opportunity in this to capitalize on its stockpile. - Bloomberg This massive inventory buildout has ultimately allowed Lenovo to adjust to changes within the supply chain this quarter; however, the company does warn that it may need to implement "adjustments" in 2026, following the ongoing memory supercycle. The official didn't reveal the impact of the ongoing memory shortages on consumer products, but it appears that a vast range of devices will be affected, including laptops and pre-built PCs. Given that Lenovo is one of the largest PC manufacturers, the supply chain will inevitably implement price hikes to combat the uncertainity. Consumer markets have already begun to witness drastic price hikes across products like consumer RAMs, and it is also anticipated that AMD and NVIDIA will implement increases across their GPU offerings as well. Such moves will ultimately impact the broader consumer industry to the point where the majority of computing devices will see noticeable price hikes. Based on reports, it is anticipated that shortages will persist into 2027, so we have a year of supply constraints ahead.

Lenovo stockpiling PC memory amid AI supply squeeze- Bloomberg By Investing.com

Investing.com-- Lenovo Group (HK:0992), the world's largest PC maker, is stockpiling memory chips amid an unprecedented supply squeeze due to the artificial intelligence industry, CFO Winston Cheng told Bloomberg TV on Monday. The company is stockpiling component inventories that are roughly 50% higher than usual, Cheng said, as outsized memory demand from AI data centers and cloud hardware tightened memory chip supplies and ramped up prices. This trend is also expected to raise the prices of consumer electronics, which could hurt demand for Lenovo's products in the coming quarters. But Cheng said the company also sees an opportunity to capitalize on its high inventories, and will aim to avoid passing on costs to its consumers. The company clocked a mild decline in its September quarter profit last week, as increased spending on AI partially offset strong PC and device sales. Cheng signaled on Monday that the company is seeking to maintain its sales momentum. In a post-earnings call, Lenovo signaled it had enough memory chips for 2026. Global memory chip prices were seen increasing rapidly in recent months, as outsized demand from the AI sector saw major producers Samsung Electronics Co Ltd (KS:005930) and SK Hynix Inc (KS:000660) prioritize making high-bandwith memory chips over traditional ones used in consumer electronics. Top Chinese smartphone maker Xiaomi Corp (HK:1810) had warned this could push up smartphone prices next year.