Storage prices soar, IDC warns: The PC market may shrink by up to 9% in 2026.

Wednesday, the latest Device Market Outlook released by International Data Corporation (IDC) shows that **due to the surge in memory prices, the global PC market may face as much as a 9% contraction in 2026**. This pessimistic forecast far exceeds the agency's November prediction of a 2.5% decline, marking a sharply deteriorated industry outlook. IDC pointed out that the global memory shortage, which has accelerated since mid-October last year, has exceeded its initial model expectations. In the neutral scenario, PC shipments are expected to drop by 5%, while the pessimistic scenario could see a decline of up to 9%. Although IDC has yet to officially revise its forecast, its latest scenario analysis is clearly more negative than a few weeks ago. The root of this crisis lies in the surging demand for AI infrastructure. Hyperscale cloud service providers’ demand for memory has skyrocketed, causing DRAM and NAND production to shift from consumer devices to enterprise-grade components such as high-bandwidth memory and high-density DDR5, which offer higher profit margins. IDC emphasizes that this is not a typical cyclical fluctuation, but a strategic reallocation of silicon capacity that may last for several years. For the PC industry, this memory shortage coincides with two critical periods: the end of Windows 10 support and the promotion of "AI PCs", making the market outlook even more severe. ## Price Pressure Transmitted to End Market With rising DRAM and SSD costs, PC manufacturers have begun signaling widespread price increases. IDC estimates that **in the pessimistic scenario, the average price of PCs may increase by 6% to 8%, while shipments may drop nearly 9% year-on-year. This forecast is a drastic downgrade from the already negative -2.4% prediction in November.** The smartphone market faces similar pressure. Memory constitutes a significant portion of the bill of materials for phones, especially for mid-range devices where profit margins are already thin. IDC warns that phone makers may respond by raising prices, reducing configurations, or both, which will reverse the ten-year trend of high-end storage configurations becoming more common. **In the pessimistic scenario, the global smartphone market could shrink by 5% in 2026, with average prices rising and longer replacement cycles.** ## Big Brands Stand Out, Small Manufacturers Under Pressure IDC expects that large OEMs such as Dell, HP, Lenovo, and Asus, with their scale advantages, inventory leverage, and long-term supply agreements, will be better able to cope with this environment than smaller manufacturers. Regional brands, white-label assemblers, and DIY system makers face much greater risks, especially in the gaming PC segment where high memory configurations are standard and cost sensitivity is high. This dynamic may further shift market share toward major OEMs, even as the overall market shrinks. ## AI PC Promotions Face Cost Dilemma The memory shortage creates a special contradiction with the promotion of AI PCs. IDC defines an AI PC as a system equipped with an NPU, but these machines actually require more memory. The minimum requirement set for Microsoft Copilot+ is 16GB, and many high-end designs are targeting 32GB or higher. **The problem is that memory is precisely the most scarce and expensive component right now.** Complicating matters, the marketing push for AI PCs has not delivered the growth manufacturers expected. User enthusiasm is limited, and dissatisfaction is growing over the rapid and often forced integration of AI features in Windows 11. Against this backdrop, the high price of AI PCs increasingly feels like a "tax" on functions that many buyers never asked for. ## Risk of Historic Downturn Emerges **A 9% decline is not catastrophic, but it's already quite severe. During the global financial crisis in 2009, the PC market fell by 11.9%, a record drop at the time.** The only worse episode occurred post-pandemic, when oversaturation caused a nearly 15% plunge, from which the industry has yet to fully recover. More worrying is that this downturn may occur in 2026—a year that should have seen strong growth due to the end of Windows 10 support and the wave of AI PCs. IDC’s conclusion is cautious yet clear: the trend sparked by the boom in AI infrastructure is reshaping the consumer hardware market in unexpected ways. Memory shortages are tightening supply, driving up prices, and forcing manufacturers to rethink product roadmaps at the most inopportune time. Risk Warning and Disclaimer The market carries risks; investment requires caution. This article does not constitute personal investment advice and does not take into account the individual investment goals, financial situations, or needs of particular users. Users should consider whether any opinions, views, or conclusions in this article are appropriate for their specific circumstances. Investment decisions made on this basis are at one's own risk.