What is HP Doing to Balance Procurement and Security?

Companies around the world have been adapting their procurement strategies in reaction to global turbulence.

Though many businesses are looking to diversify their sourcing and reduce reliance on Chinese operations, HP is one of the companies actively moving towards the country for its sourcing needs.

As market dynamics shift, Chinese manufacturers are beginning to face demand for memory chips.

A market shortage

HP is a technology company that designs its products to make the world a better place. It prioritises sourcing which is responsible across climate action, human rights and digital equity. Through technological innovation, HP aspires to drive meaningful progress, recognising that strong ideas can come from anywhere.

Now, it diversifying its memory chip sourcing towards Chinese firms, after years of relying on suppliers from across America, South Korea and Taiwan. HP is one of the four companies actively considering this switch, which comes at a time of a global shortage.

Due to the increase in AI usage, data centres are using memory chips at an unsustainable rate, buying out the stock from American corporations like Nvidia Corp. Samsung, Micron and SK Hynix, who hold 90% of the DRAM market, have moved their capacity to developing high-bandwidth memory (HBM) for AI data centres.

A major impact in this overconsumption from data centres is the immense price spikes. One type of DRAM rose 75% from December to January, with a growing number of retailers raising the prices of their products. As a result, consumer electronics companies like HP and Samsung, have been trying to mitigate the fallout from dwindling supplies.

“We stand at the cusp of something that is bigger than anything we’ve faced before,” says Tim Archer, Chief Executive Officer at Lam Research Corp.

“What is ahead of us between now and the end of this decade, in terms of demand, is bigger than anything we’ve seen in the past, and, in fact, will overwhelm all other sources of demand.”

All supply chain, sustainability, Scope 3 and net zero leaders should attend:

• Procurement and Supply Chain LIVE: The Net Zero Summit - QEII Centre, London, March 4-5
• Procurement and Supply Chain LIVE: The US Summit - Navy Pier, Chicago, April 21-22

Co-located with Sustainability LIVE, these events brings together CSCOs, CSOs and senior decision-makers at a moment when sustainability, supply chains and commercial performance are increasingly interconnected.

Tickets can be booked online today for The Net Zero Summit and The US Summit. Group discounts available.

Diversifying sourcing

HP has already started qualifying DRAM chips from ChangXin Memory Technologies (CXMT). This consists of testing the various components involved to ensure they need the performance and quality standards that HP champions. Dell is also at this stage, while Acer and Asus have started to request their Chinese manufacturing partners source locally produced memory chips.

The market change towards China – particularly in a time when many companies are moving sourcing away from China – demonstrates where the emerging market lies. China's leading company in memory-chip manufacturing, CXMT, recently made a US$4bn share offering following on from its major technological advancements.

Though going through the qualification process does not automatically mean HP will use CXMT, this company is acting as a potential life source for PC makers. If the market remains constrained with high prices, HP might see the benefits in CXMT for non-US markets. 

This shortage has allowed Chinese electronics contract manufacturers to gain a more important role in the supply chain, as some brands have been asking partners to expand sources. Over the years, Acer has increasingly relied on Chinese contract manufacturers in order to lower costs, with the openness to using Chinese-made memory chips. 

More risk mitigation

As well as protecting its supply chain from shortages, HP has also been making moves to renew its cybersecurity integrity, having renewed its multi-year agreement with Karamba Security. Through this, it will continue to utilise its XGuard cybersecurity software across its printer products.

This covers its networked and cloud-connected printers which include firmware that can be targeted by cyberattacks. Throughout 2025, cyberattacks became a major threat to brands around the world, in part due to the rise in digitisation and the rise of AI use. This increase and overreliance on digital firmware made companies vulnerable to attacks, with a range of global supply chains being hit over the recent year.

By renewing its agreement and diversifying its sourcing strategy, HP is working to build supply chain resilience, led by its procurement teams. By paying attention to market trends, HP is limiting its vulnerability to shortages and price rises, instead acting to investigate potential new suppliers.