Memory inflation weighs on demand; cutting 2027 PC units

PC demand weakening in 2H26; cutting 2027 units. PC shipment growth deteriorated from +5.5% YoY in Q126 to -2.5% in Q226, with sequential growth of only 1% below normal seasonality. Memory prices are increasingly a headwind with DRAM contract prices up 766% and NAND prices 476% since mid-2025. Due to memory costs likely to persist at high levels and CPU makers also pushing through double digit price increases, we expect a soft PC unit outlook next year. We maintain our 2026 forecast at 241mn units, down 11%, but lower 2027 from 2% growth to a 4% decline. ASP growth should partly offset the volume decline, leaving 2027 industry revenue up 2% to US$205bn versus our prior US$210bn forecast. UBS Evidence Lab's 14th Global Consumer PC Survey of 1,500 PC owners in the US and China shows the replacement cycle shortened from 3.03 to 2.86 years, budgets were flat in the US and up 3% in China, 63% of US respondents were willing to pay more, and 69% were interested in AI PCs with willingness to p