The root cause of the AI supply chain shock is simple: AI data centres are consuming everything. Memory manufacturers have shifted production capacity away from standard PC components toward high-margin AI server memory (HBM). The result? DRAM and NAND flash prices have entered a “structural upward cycle” that industry leaders warn will persist through 2030 and beyond.
The numbers are staggering:
- PC memory and storage costs rose 40% to 70% between Q1 and Q4 2025 alone
- Combined DRAM and SSD costs could rise by more than 100% in 2026
- Major OEMs including Dell, Lenovo, HP and HPE are planning price increases of 15% to 20%
- Intel has confirmed CPU price increases, breaking the industry’s long-standing “prices only go down” logic
- Apple, with all its bargaining power, raised MacBook prices by ~20%, stating it had “never seen parts prices rise this fast”
The impact on the ground: One enterprise buyer saw the same laptop configuration jump from $4,600 to $6,400 in a single year. Retail prices are rising 20% to 40% year-over-year. Vendors are operating with quote validities so short that “prices change between quote and shipment”.
The budget trap
Now overlay this on your IT budget reality:
- Morgan Stanley’s Q4 2025 CIO survey shows 2026 hardware budget growth at just 1%, a 15-year low outside of COVID
- 30% to 60% of customers are cutting PC, server, and storage spend to absorb higher input costs
- Gartner projects global IT spending will hit $6.08 trillion in 2026, but the growth is overwhelmingly driven by AI infrastructure, not endpoint hardware
You’re being squeezed from both sides: costs up 20%+, budgets up 1%.
The consequence: Over half of B2B channel partners report clients are delaying hardware refresh plans, waiting for the market to stabilise. But stability isn’t coming soon, Omdia expects prices to remain high through 2026, with meaningful easing only from 2027.
The strategic pivot: data over guesswork
This is exactly why the wholesale rip-and-replace strategy is dangerous. You don’t need a vendor to tell you to buy new kit. You need a free, forensic baseline that tells you exactly what you own, what works, and what actually needs replacing.
The Algiz Technology Engage Assessment Programme does exactly that, specifically for leaders who don’t have time to waste on PoCs.
- Zero-touch: No agents to deploy across your global estate
- Fast: Baseline results in 10 working days
- Board-ready: Clear, actionable report showing which machines are compliant today, what the actual blockers are, and which devices are genuine security liabilities
The double-saving strategy
Why pitch a single budget line to your CFO when you can pitch a delta?
- Cut the ESU tax by migrating compatible devices immediately (Year 3 ESU hits ~$244/device)
- Reduce hardware costs by surgically replacing only machines that genuinely fail—rather than guessing a 100% replacement rate at today’s inflated prices
This turns a daunting migration into a targeted optimisation exercise. You save on support costs and avoid unnecessary CapEx—delivering double-digit ROI before you’ve even rolled out the new OS.
Why wouldn’t you take 10 days to validate your budget?
For a transformation leader, the best decision is an informed one. For a CIO, it’s a free one.
Don’t let outdated assumptions, and a volatile hardware market, dictate your 2027 budget. Get the data, own the narrative, and move your roadmap forward with confidence.
Book your Engage Assessment here, because guessing isn’t a strategy.
