Peace President's Iran war piles more pain on already battered PC market

Memory costs were already through the roof - now freight's spiking too, and budget systems face extinction

America's war with Iran is jacking up the pressure on computing markets already struggling with memory shortages and component cost inflation, meaning buyers should brace themselves for even higher prices this year.

This is the bad news from market watcher IDC, which says that the remainder of the year will see further declines in PC shipments as system prices continue to go up.

President Trump destablized the PC industry in 2025 through ever-shifting tariffs on imported goods, and now the conflict in the Middle East is adding extra uncertainty and more unnecessary cost, according to IDC.

"The Middle East conflict has injected a fresh layer of volatility into a fragile computing devices market, straining global logistics through a double-edged sword of rising energy costs and freight spikes," said IDC Devices senior research analyst Isaac Ngatia.

"On one hand, sea corridors continue to face ongoing disruption, especially ones connecting Asia and EMEA, on the other, pivoting to air freight has become more expensive. Ultimately, these premiums are trickling down the value chain, intensifying the pricing pressure of PCs on the end-users."

Before the Peace President's latest foreign adventure kicked off, analysts had already noted that prices for some types of memory have doubled or quadrupled since last year, and forecast that DRAM and NAND would see a further 130 percent rise by the end of 2026.

As The Register reported previously, the impact of this means that budget systems are likely to disappear, because memory already makes up a larger proportion of the overall bill of materials, so the builders simply cannot absorb the increase in memory prices for entry-level PCs, especially those below about $500.

In the meantime, the expected memory price hikes led to a rise in shipments during the first quarter of this year, as resellers, corporate buyers and anyone who can afford it brings forward any potential purchases before costs peak.

This saw shipments up 2.5 percent to 65.6 million units compared with the same period in 2025, but the trend is expected to be downwards for the rest of this year as the various constraints take effect.

Omdia reports much the same, putting the Q1 rise in shipments at 3 percent to 64.8 million units, supported by "vendors and channel partners pulling orders forward ahead of a widely anticipated increase in component costs."

"With supply-chain pressures still building, Q1's modest growth is likely to mark the high point for the year," said principal analyst Ben Yeh.

"Memory and storage costs are expected to rise further and more steeply than previously assumed from Q2, squeezing PC vendor gross margins and forcing them to pass costs through to channel partners and end-customers," he warned.

"CPU prices are a smaller but compounding pressure, with Intel and AMD projecting increases of 10 to 25 percent into Q2," Yeh added.

Canalys (now Omdia) research manager Kieren Jessop told The Register that the Iran war has not so far had a direct impact on the industry's ability to deliver shipments.

"However, factors like increased freight and insurance costs may further squeeze margins at a time where they are already under significant pressure from massive cost increases for memory and storage," he said.

"From an end-customer perspective, it may have an indirect impact, particularly for consumers. As we saw with the post-Ukraine inflation spike, consumers increasingly make purchase decisions across categories, relegating discretionary tech spend below other categories. We expect this may have an impact on consumer PC shipments as energy prices rise due to the conflict."

Those hoping for a period of stability to settle the supply chains will not draw much comfort from the US president's latest words.

"Our great Military is Loading Up and Resting, looking forward, actually, to its next Conquest," he posted on Truth Social. ®