Breaking News
Lenovo Group warned on Thursday that a worsening global memory-chip shortage is putting pressure on PC shipments, as soaring component costs driven by artificial intelligence demand ripple through the hardware industry.
Speaking after the company reported its third-quarter results, Chief Executive Yang Yuanqing said Lenovo has raised prices to offset surging memory costs and is accelerating its pivot toward the fast-growing AI inference market.
The world’s largest PC maker said third-quarter revenue rose 18% year on year to $22.2 billion, beating market expectations of $20.6 billion. However, net profit declined 21% to $546 million, weighed down by a $285 million restructuring charge.
The restructuring is aimed at sharpening Lenovo’s focus on AI inference and higher-margin segments, with the company targeting cost reductions of up to $200 million over the next three years, Yang said.
The warning highlights mounting strain across the PC industry as memory shortages — particularly in DRAM and NAND — intensify amid heavy demand from AI data centres. Component tightness has begun squeezing margins for device makers and could weigh on production volumes in coming quarters.
Lenovo said it is taking pricing actions to protect profitability but acknowledged that sustained cost pressures could affect shipment momentum. Industry analysts note that PC makers remain vulnerable to swings in memory pricing, which can account for a significant portion of bill-of-material costs.
Earlier, Samsung Electronics also flagged rising memory costs and suggested that device prices across categories could increase as shortages persist.
While the PC market has stabilised following its post-pandemic slump, the renewed component crunch presents fresh headwinds. Lenovo’s strategy to expand further into AI inference — which supports enterprise and edge AI workloads — reflects a broader industry shift toward higher-growth, AI-driven opportunities as traditional PC demand remains sensitive to macroeconomic and supply-chain disruptions.
The company said it will continue balancing cost management with investment in strategic growth areas, particularly AI-enabled infrastructure and enterprise solutions, even as near-term supply constraints cloud shipment outlooks.
Speaking after the company reported its third-quarter results, Chief Executive Yang Yuanqing said Lenovo has raised prices to offset surging memory costs and is accelerating its pivot toward the fast-growing AI inference market.
The world’s largest PC maker said third-quarter revenue rose 18% year on year to $22.2 billion, beating market expectations of $20.6 billion. However, net profit declined 21% to $546 million, weighed down by a $285 million restructuring charge.
The restructuring is aimed at sharpening Lenovo’s focus on AI inference and higher-margin segments, with the company targeting cost reductions of up to $200 million over the next three years, Yang said.
The warning highlights mounting strain across the PC industry as memory shortages — particularly in DRAM and NAND — intensify amid heavy demand from AI data centres. Component tightness has begun squeezing margins for device makers and could weigh on production volumes in coming quarters.
Lenovo said it is taking pricing actions to protect profitability but acknowledged that sustained cost pressures could affect shipment momentum. Industry analysts note that PC makers remain vulnerable to swings in memory pricing, which can account for a significant portion of bill-of-material costs.
Earlier, Samsung Electronics also flagged rising memory costs and suggested that device prices across categories could increase as shortages persist.
While the PC market has stabilised following its post-pandemic slump, the renewed component crunch presents fresh headwinds. Lenovo’s strategy to expand further into AI inference — which supports enterprise and edge AI workloads — reflects a broader industry shift toward higher-growth, AI-driven opportunities as traditional PC demand remains sensitive to macroeconomic and supply-chain disruptions.
The company said it will continue balancing cost management with investment in strategic growth areas, particularly AI-enabled infrastructure and enterprise solutions, even as near-term supply constraints cloud shipment outlooks.
See What’s Next in Tech With the Fast Forward Newsletter
Tweets From @varindiamag
Nothing to see here - yet
When they Tweet, their Tweets will show up here.
