Lenovo Group shares fell nearly 10 per cent in Hong Kong on Monday after the technology giant warned that memory chip prices are unlikely to return to last year’s lows, citing sustained demand from artificial intelligence (AI) applications that is reshaping the semiconductor market.
The company’s shares dropped as much as 9.8 per cent to HK$21.14 (approximately US$2.72), their lowest level in a month, after executives presented their long-term outlook for the memory industry during the ISC 2026 conference.
The sell-off came amid continued volatility in semiconductor stocks, with investors taking profits from AI-related hardware companies following a strong first-half rally.
The broader chip sector recorded its sharpest weekly decline since March 2025 despite continued optimism over long-term AI demand.
During the presentation, Lenovo said prices for DRAM and NAND memory chips were unlikely to revisit the lows experienced over the past year, even as manufacturers increase production capacity.
While executives acknowledged that suggesting prices would “never” return to previous levels was partly made in jest, they argued that the industry had entered a “new normal” characterised by structurally higher memory prices that could persist well into the next decade.
The company attributed the shift to the rapid expansion of AI infrastructure, which is significantly increasing demand for advanced memory products.
Servers designed to support large language models require considerably larger amounts of DRAM and high-bandwidth memory than conventional enterprise systems, driving sustained consumption across the sector.
Lenovo also noted that planned capacity expansions expected from around 2028 were unlikely to create the oversupply conditions that previously triggered steep declines in memory prices.
The company further warned that enterprise customers may need to reconsider how they configure next-generation servers, as memory is expected to account for a growing share of overall system costs.
Lenovo’s assessment broadly mirrors the outlook of major memory manufacturers, including SK Hynix, which recently announced plans to triple its production capacity by 2034 in anticipation of sustained AI-driven demand.
The comments underscore the growing belief across the semiconductor industry that AI is fundamentally altering the long-term dynamics of the memory market, with higher demand expected to support stronger pricing for years to come.
