Shares of Lenovo Group (HK:0992) plunged nearly 10% in Hong Kong on Monday after executives told attendees at the ISC 2026 conference that memory prices are unlikely to revert to the lows seen last year, arguing that demand tied to artificial intelligence will sustain a higher price baseline for DRAM and NAND chips.
The stock slid as much as 9.8% to HK$21.14, marking its weakest intraday trade since May 28. The sharp decline followed the company presentation in which Lenovo outlined a long-term view for memory pricing that differs from prior cyclical patterns.
Lenovo’s remarks come amid recent turbulence in semiconductor equities. Investors have been rotating out of AI hardware names after a strong first-half rally, even though memory suppliers have signalled robust demand. In the latest move, chip stocks recorded their steepest weekly decline since March 2025 as some investors took profits.
In its presentation, Lenovo said it does not expect DRAM and NAND prices to return to the lows experienced over the past year, despite manufacturers planning to expand production capacity. Company executives noted that describing prices as unlikely to ever fall back was partly tongue-in-cheek, but they maintained that the industry is shifting into a "new normal" in which memory cost levels will remain structurally higher well into the next decade.
The company’s assessment mirrors a growing view within the semiconductor sector that AI workloads are changing baseline memory demand. Servers designed to support large language models and comparable AI applications consume significantly more DRAM and high-bandwidth memory than conventional enterprise systems. Continued capital investment in AI infrastructure is expected, Lenovo said, to absorb a substantial portion of the additional supply that manufacturers plan to bring online over the coming years.
Lenovo also commented that capacity additions targeted to start around 2028 are unlikely to recreate the oversupply conditions that in the past led to steep price drops. The firm suggested that enterprise buyers may need to reconsider how they configure next-generation servers as memory becomes an increasingly large portion of total system cost.
That outlook, Lenovo added, aligns with expansion plans disclosed by major memory suppliers. The company specifically cited SK Hynix Inc (KS:000660), which has announced intentions to significantly expand production capacity by 2034 as it prepares for sustained, long-term demand driven by AI.
Market context and implications
Lenovo’s public stance underscores a broader recalibration among hardware vendors and suppliers about how AI will reshape demand for memory components. If memory prices remain elevated as the company suggests, the cost structures for server builders and cloud operators could shift, prompting changes in procurement and systems-architecture decisions.
At the same time, the near-term reaction in Lenovo’s stock highlights investor sensitivity to forward-looking cost assumptions and the potential for earnings impact if higher memory prices persist or if customer adoption patterns adjust differently than expected.
Summary of facts cited
- Lenovo said DRAM and NAND prices are unlikely to return to last year’s lows and signalled a structurally higher pricing environment for memory.
- The company made these comments at the ISC 2026 conference.
- Lenovo shares fell up to 9.8% to HK$21.14, the lowest level since May 28.
- Semiconductor stocks experienced a volatile week, posting their steepest weekly drop since March 2025.
- Lenovo noted capacity expansions beginning around 2028 are unlikely to create previous oversupply dynamics.
- The firm said enterprise customers may need to reconsider server configurations as memory becomes a larger share of system costs.
- Lenovo pointed to SK Hynix’s announced plans to markedly increase production capacity by 2034 as consistent with its outlook.