Lenovo Shares Slide as AI-Driven Memory Demand Signals Higher DRAM and NAND Prices

Lenovo Group (HK:0992) shares tumbled nearly 10% in Hong Kong on Monday after the company said it expects DRAM and NAND memory prices to remain structurally higher for years, citing booming artificial intelligence (AI) demand as a key driver of the global memory market.

The stock fell as much as 9.8% to HK$21.14, marking its lowest level since May 28, after Lenovo executives shared their long-term outlook on memory pricing during a presentation at the ISC 2026 conference.

The decline came during a volatile period for semiconductor stocks, as investors rotated out of AI-related hardware companies following a strong rally in the first half of the year. Despite positive demand trends from leading memory manufacturers, chip stocks recorded their biggest weekly decline since March 2025 as traders took profits.

Lenovo believes the memory industry has entered a "new normal," where DRAM and NAND prices are unlikely to return to the lows seen over the past year. While company executives acknowledged that saying prices would "never" revisit previous levels was partly humorous, they stressed that the combination of AI adoption and changing market dynamics is expected to keep memory prices elevated well into the next decade.

According to Lenovo, artificial intelligence is fundamentally reshaping memory demand. AI servers designed to run large language models require significantly larger amounts of DRAM and high-bandwidth memory (HBM) than conventional enterprise servers. At the same time, ongoing investments in AI infrastructure are expected to absorb much of the industry's expanding production capacity over the coming years.

The company also noted that planned manufacturing capacity expansions beginning around 2028 are unlikely to create the oversupply conditions that historically triggered sharp declines in memory chip prices. Instead, Lenovo expects supply growth to remain balanced against rising AI-related demand.

As memory becomes a larger component of server costs, Lenovo said enterprise customers may need to rethink how they configure next-generation data center systems to optimize performance and spending.

Lenovo's outlook aligns with broader expectations across the semiconductor industry. Major memory supplier SK Hynix has already announced plans to triple its production capacity by 2034, reflecting confidence that AI-driven demand for DRAM, NAND, and advanced memory technologies will remain strong over the long term.

The company's comments reinforce the growing belief that artificial intelligence is transforming the global semiconductor industry, creating sustained demand for memory chips and supporting higher pricing even as manufacturers continue expanding capacity.