- Lenovo reacts quickly to storage shortages due to aggressive demand for AI
- Semiconductor giants shift production to high-bandwidth storage for AI servers
- Traditional memory production is declining as global price pressure is rapidly increasing
Lenovo has confirmed it is stockpiling memory chips and other key components to cope with the tightening of its global supply chain due to demand for artificial intelligence.
Business executives described the situation as unprecedented pressure on AI, with accelerated purchases by data center operators and cloud platforms limiting availability.
Lenovo’s inventory levels are now around 50% higher than normal, affecting its entire range of devices, including the mini PC segment.
Because the storage market is under pressure
Rising memory prices are linked to a broader shift in the semiconductor industry.
Major manufacturers, including samsung and SK Hynix, have shifted significant production capacity to high-bandwidth storage used for AI servers.
This transition has reduced the performance of traditional memory chips commonly used in consumer computers, smartphones and gaming devices.
As a result, global memory prices have continued to rise in recent months, affecting electronics manufacturers.
This situation is already affecting several product lines, especially systems aimed at enterprise laptop buyers who rely on stable component availability.
Lenovo executives said the expansion is part of a long-term plan to avoid disruption through 2026.
The company recently signed long-term supply contracts to guarantee storage availability next year.
The CEO also stated that the company believes that these agreements represent optimal contracts under prevailing conditions.
“We have signed the optimal agreement with major component suppliers to ensure we have enough supplies next year,” Yang Yuanqing said.
“Overall, we don’t see a bubble because the next step will be the democratization of artificial intelligence.”
Lenovo acknowledged that higher storage costs could drive up consumer electronics prices in coming quarters, noting that spending on artificial intelligence has already weighed on recent profits, with the added costs partially offsetting sales of PCs and thin devices.
However, Lenovo wants to maintain the pace of sales and not pass on the increased parts prices directly to consumers if possible, Lenovo said.
Other companies, including Xiaomi, have warned that smartphone buyers could face higher prices next year due to the same supply shortage.
This means, Lenovo’s latest financial results show revenue growth and adjusted earnings improving, even as the company’s shares remain down this year.
However, semiconductor manufacturers expect AI-driven demand to further change manufacturing priorities, which could lead to a shortage of traditional memory products.
IN Bloomberg