The rate of increase is slowing. The prices are not coming down.
IT hardware prices are rising because memory manufacturers have redirected production capacity toward AI infrastructure, reducing the supply of conventional memory used in business laptops and servers. Gartner expects average PC prices to be 17% higher than 2025 levels by the end of 2026. Increases are slowing, but supply is not expected to improve meaningfully before 2028, which means FY27 budgets set before 30 June will buy less hardware than they were scoped to.
Your budget was set against pricing that has since moved
Most Australian mid-market businesses locked FY27 budgets in the final months of the previous financial year. Those numbers were built on quotes and assumptions from a market that has changed since.
The consequence is straightforward arithmetic. A budget approved to replace a given number of devices now buys fewer of them. Nothing went wrong in the planning process. The inputs changed after the decision was made.
What is actually driving the increases?
Memory manufacturers have deliberately reallocated production capacity toward AI infrastructure, which has reduced the supply of conventional memory used in business hardware. This is not a repeat of the pandemic shortage, and the difference matters for planning.
The pandemic shortage was a demand spike combined with logistics disruption, and it corrected once both eased. What is happening now is a structural change. The three manufacturers controlling the overwhelming majority of global DRAM production have shifted wafer capacity toward high bandwidth memory for AI accelerators, which carries far higher margins. Every wafer committed to AI memory is one that does not become conventional memory for a business laptop or a server.
Gartner forecasts memory will account for 23% of a PC’s total component cost this year, up from 16% in 2025. That leaves vendors very little room to absorb the increase rather than pass it on.
The pressure is visible further down the chain too. When JB Hi-Fi reported its annual results in August, management told the market that some PC brands had raised prices by more than 50%, driven by memory shortages linked to AI data centre demand. If a retailer with that scale and buying power is absorbing increases of that size, a mid-market business ordering fifty laptops has considerably less leverage.
Are prices about to come down?
Not soon, and the nuance here is worth understanding before deciding either way.
The rate of increase is slowing. TrendForce projects conventional DRAM contract prices rising 13% to 18% quarter on quarter in Q3 2026, a marked slowdown from the roughly 60% jumps recorded earlier in the year.
That slowdown is easy to misread. It is not being driven by supply improving. It is being driven by manufacturers reaching the limit of what the market will absorb. Prices are still climbing, from a base that has already moved substantially.
Gartner has indicated memory pricing is expected to remain elevated through to at least 2027. New fabrication capacity has been announced across the industry, but those facilities take years to reach volume production.
Waiting for prices to normalise is not a strategy with a date attached to it. Deferring a refresh may still be right for other reasons. It should not be done on the expectation of a better price next quarter.
What happens when the budget no longer covers the refresh?
There are three ways this typically plays out, and it is worth being deliberate about which one applies.
The budget absorbs it. If there was contingency in the original number, or the scope was modest, the increase may be manageable without a conversation. Worth confirming rather than assuming.
The scope contracts. The same budget covers fewer devices, which means deciding which parts of the fleet get refreshed and which wait. Gartner expects business PC lifetimes to increase by around 15% as organisations do exactly this. It is a legitimate response, but extending the life of ageing devices carries its own costs in support burden and security exposure, and those belong in the comparison.
The budget is revisited. This means going back to the executive team, which is the least comfortable option and often the correct one. It is far easier to do with current pricing evidence and a phased plan than with a general statement that hardware has become more expensive.
What to do now
Establish what your refresh actually costs today rather than what it was scoped at. The gap between those two numbers is the thing to act on, and it cannot be estimated reliably from last year’s quotes.
Separate what is urgent from what is deferrable. Devices past end of support and infrastructure carrying known risk are a different category from equipment that is simply ageing.
Sequence around lead times as well as price, because both constraints are still active. We covered that side in our earlier piece on infrastructure timing.
Put the numbers in front of the people who control the budget early. A revised figure delivered in August with evidence behind it lands very differently from the same figure delivered in March when something has already failed.
Where to start
f your FY27 refresh needs re-scoping against current pricing, our free hardware refresh business case is built for that. It is a scoping session with a written output: an assessment of your current environment, a total cost of ownership analysis, an infrastructure risk analysis, and a phased refresh plan. It gives you current numbers to take to your executive team rather than an estimate, and there is no obligation attached.
If you would rather start with your own figures, our cost of delay calculator gives you an indicative view of what deferring your refresh is likely to cost, in a couple of minutes and with no obligation.
FAQs
Why are IT hardware prices increasing in 2026?
Memory manufacturers have redirected production capacity toward high bandwidth memory for AI data centres, which carries higher margins. This has reduced supply of the conventional DRAM and NAND used in business laptops, desktops and servers.
Â
How much have business PC prices gone up?
Gartner expects average PC prices to be 17% higher by the end of 2026 compared with 2025 levels. Increases vary by vendor and configuration, and some brands have raised prices considerably more on specific lines.
Â
When will hardware prices come down?
Industry expectations point to constrained supply persisting through at least 2027, with gradual improvement as new fabrication capacity reaches volume production. Quarterly increases are slowing during 2026, but prices are still rising rather than falling.
Â
Should we delay our hardware refresh until prices improve?
Deferring on the expectation of better pricing is difficult to justify given current forecasts. Deferral may still be right for other reasons, such as workloads moving to cloud or devices having genuine life remaining, but those are separate arguments.
Â
Does this affect servers as well as laptops?
Yes, and in some cases more acutely than client devices, because AI infrastructure competes directly for server DRAM and enterprise storage.
