How enterprise storage vendors are responding to the memory crunch
AI data center demand for memory has caused a chip shortage and surge in prices
The build-out of data centers driven by the AI boom has caused a memory crunch. Almost all servers depend on memory chips to process data at high speed and power AI applications.
According to Trendforce, AI will consume 20% of dynamic random access memory (DRAM) wafer capacity in 2026. Data centers’ appetite for memory chips means there are fewer to go around, especially for enterprise products, and this is forcing vendors to push up their prices.
“The shortage is a perfect storm brought about by AI-driven DRAM demand, hyperscaler stockpiling, and wafer capacity reallocation to high bandwidth memory. Pricing and quoting are now a moving feast,” Ian Foddering, vice president of Europe at IT infrastructure solutions provider SHI, tells ITPro.
While there has been some optimism, including from Foddering, that the memory crunch could ease at the end of this year into early 2027, SK Group chairman Chey Tae-won has warned that the shortage could persist until 2030, even though more wafer production will be brought online before then.
We take a look at how four of the main enterprise storage vendors – Dell, Everpure (formerly Pure Storage), HPE, and NetApp – are managing the shortage and the impact it’s having on their pricing.
Dell
Last November, when reporting its fiscal Q3 2026 results, Dell COO Jeffrey Clarke warned of price increases ahead.
“The fact is, the cost basis is going up across all products. No one more unique than others. Everything [that] uses a CPU has DRAM, has storage in it,” Clarke told analysts on the earnings call.
Nevertheless, the company would be doing everything it could to mitigate the impact of the memory shortage. And, it appears it’s well placed to come out the other side stronger.
“We have a lot of experience with this. This isn’t our first DRAM cycle. There have been seven, I think, in the last 40 years. (CEO) Michael (Dell) and I have been here navigating the organization in various ways through that time,” Clarke added.
Storage revenue grew 2% in the November to January period, while all-flash arrays posted their third consecutive quarter of double-digit growth.
Everpure
Everpure had held off raising prices for as long it could, but eventually had to in early February due to “the dramatic and rapid rise in component prices”.
CEO Charlie Giancarlo said on the company’s fiscal Q4 2026 earnings call later in the month that he believes “we were the last in our industry to raise prices, and I also believe that our increase was the lowest in the industry, to protect our customers”.
Everpure expects to experience longer lead times and shipment delays as a result of component shortages. However, Giancarlo stressed on the call that the company has built a diversified supply chain to mitigate the impact of any disruption.
Quarterly revenue exceeded the $1bn mark for the first time in the three months to 1 February, “driven by broad-based strength across our business, particularly in enterprise”.
Since the call, Giancarlo has warned customers to brace for price hikes, while pledging to absorb as many costs as possible.
HPE
With memory and storage now making up more than half of the cost of a server, HPE has reworded its terms and conditions to allow it to reprice orders for cost increases that occur between orders being placed and shipped.
CEO Antonio Neri explained on HPE’s fiscal Q1 2026 earnings call in early March that the company is “protecting our margins” by adopting “an agile pricing posture with price adjustments across the entire portfolio with shorter quote commitment cycles.”
Based on conversations with many European customers, HPE doesn’t expect them to defer purchases as a result of higher price, however.
“All of them said, okay, I understand the price increases. What we can do to shape the demand, maybe a different configuration, some may take a lower-end configuration to get the product. But it was all about speed to get the product, not the price,” said Neri.
Revenue from its Alletra MP storage platform increased 42% year-over-year in the November to January period. This marked the fifth consecutive quarter of double-digit growth.
NetApp
NetApp raised its prices at the beginning of November and will do so again if needed, CEO George Kurian said on the company’s fiscal Q3 2026 earnings call at the end of February.
Kurian explained that NetApp is taking critical steps to manage what he described as “the unprecedented inflation in memory prices”. The company is working with customers and channel partners “to be more agile in this dynamic environment”, while it’s also “staying super close” to suppliers to ensure component supply and meet demand.
“We are not experiencing any supply shortages at this time and are not aware of any that [are] upcoming,” Kurian told analysts on the call.
All-flash revenue jumped to a quarterly record $1bn in the November to January period, up 11% year-over-year, for an annualized net run rate of $4.2bn. However, these numbers don’t reflect the impact of the price increases introduced at the start of the quarter, because customers have 90 to 120 days to manage purchase agreements. The next earnings report in May could paint a different picture.
