Navigating the 2026 Hardware Price Surge

Should you buy now – or sweat your assets further?

For the past decade, IT procurement has largely operated on the assumption of predictable, cyclical pricing. However, as we move through early 2026, a fundamental shift in the global semiconductor supply chain is dismantling that certainty. At Covenco, we feel the current volatility in the cost of servers, storage, and networking equipment may not be a temporary blip, but a structural realignment of the market. Here’s why:

The Catalyst: More Than Just a Shortage

While the 2021 supply chain crisis was largely driven by logistics and pandemic-induced demand spikes, the 2026 landscape is defined by a permanent reallocation of manufacturing capacity.

The primary driver is the unprecedented demand for AI-optimised infrastructure. Leading semiconductor foundries have shifted a significant portion of their wafer production toward high-margin AI accelerators and specialised components. This ‘AI-first’ priority has left the traditional enterprise hardware market – specifically the mid-market server and storage sectors – competing for a shrinking pool of mature fabrication capacity.

Furthermore, geopolitical friction has introduced a ‘scarcity premium’ on raw materials. Export restrictions on essential minerals like gallium and germanium have increased the baseline cost of production, ensuring that even if supply eases, the floor for hardware pricing remains higher than in previous years.

Projections for 2026 and 2027

Current market data and vendor signals suggest that enterprise hardware costs will continue a steep upward trajectory throughout the remainder of 2026.

Q1 – Q2 2026: We are already seeing initial price adjustments of 15% to 20% across core server and networking lines as manufacturers pass through their increased input costs.

Q3 – Q4 2026: Projections indicate a secondary wave of increases as hyperscale data centre demand further crowds out the mid-market, potentially pushing total year-on-year rises toward 30%.

Into 2027: While the rate of increase may slow, the market will remain under pressure as long-term contracts for the next generation of components are locked in at these elevated rates.

When Will the Market Level Off?

Historical patterns and current investment timelines suggest a ‘levelling off’ period is unlikely before late 2027 or early 2028. The timing of a more settled market depends on two primary influences:

New Fab Capacity:
Significant global investments in new wafer fabrication plants (fabs) are currently underway. However, these facilities have lead times of several years. Meaningful increases in global output are not expected to hit the market until the latter half of 2027.

Standardisation of AI Demand:
As the initial ‘land grab’ for AI infrastructure matures into a more sustained operational phase, we expect a rebalancing of supply that may allow standard enterprise components to see better availability.

The ‘New Normal’: Why Pre-2026 Prices are History

It is tempting to look back at the post-Covid recovery as a template for a return to lower prices. However, the current situation differs in one vital way: complexity.

Unlike the 2021 crisis, where prices fell as logistics bottlenecks cleared, the 2026 surge is tied to the rising costs of energy, advanced manufacturing processes, and increasingly rare raw materials. Much like the transition from traditional to electric vehicles in the automotive sector, the baseline cost of building modern enterprise systems has fundamentally increased. We do not anticipate prices returning to pre-2026 levels; instead, we are entering a period where hardware is a more significant portion of the total cost of ownership than it has been for twenty years.

Need to buy new? Here’s Covenco’s Advice

In this environment, hesitation is a budget risk. Quotes that are valid today may look like bargains by the time Q2 budgets are reviewed.

Covenco advise that you speak to us today to configure and finalise your new systems within Q1. By securing your hardware requirements now, you can lock-in current costs and protect your IT budget from the significant price rises forecasted for later this year and into 2027.

The Alternative Strategy: Sweat Your Existing Assets

For many organisations, the current volatility may make a full-scale hardware refresh financially unviable or strategically mistimed. If your preference is to defer capital expenditure, Covenco provides a robust framework to extend the lifecycle of your existing assets without compromising on performance or reliability.

By leaning on our deep expertise in legacy environments – including older IBM Power Systems and diverse x86 architectures – you can benefit from a comprehensive brokerage service for hard-to-find parts and upgrades. Furthermore, to ensure your environment remains compliant and stable, we provide third-party maintenance solutions that pick up where vendor support ends. This approach allows you to bridge the gap until the market settles, ensuring your current infrastructure remains a robust and reliable foundation for your operations.

Covenco’s Strategic Recommendation

In this environment, agility is your greatest asset. Whether you choose to invest in new infrastructure or fortify your existing estate, the window to act before the next wave of price adjustments is closing.

If you really do need new, Covenco advise that you speak to us today to configure and finalise your new systems within Q1.

Alternatively, if your strategy is to extend the life of your current hardware, let us help you secure the parts and maintenance contracts needed to maintain stability through this period of market instability.

If you are struggling to decide, here’s our decision matrix to help you:

Get in touch

Contact Steve Hollingsworth, Sales Director at Covenco for direct and customised advice. Steve has a long history in new and refurbished hardware supply, with detailed knowledge across the hardware spectrum.