The Memory Crunch Pinches Cisco’s Profits
Summary
The Next Platform's Timothy Prickett Morgan discusses how the AI boom has slowly impacted Cisco Systems, a leading supplier in enterprise networking, highlighting the challenges posed by a memory crunch on the company's profits.
Key Insights
What is the 'memory crunch' affecting Cisco and the tech industry?
The 'memory crunch' refers to a severe shortage of memory chips, particularly DRAM and high-bandwidth memory (HBM), driven by explosive AI demand that has led manufacturers like Samsung, SK Hynix, and Micron to redirect production to higher-margin AI products, causing supply constraints for standard server memory until at least 2028.
How is the memory crunch impacting Cisco’s profits?
The memory shortage disrupts Cisco's supply chain for enterprise networking and AI infrastructure products like Silicon One switches, raising costs, delaying deployments, and pinching profits amid surging AI-driven compute and networking demand that Cisco aims to capture with innovations like the G300 for gigawatt-scale AI clusters.