No fire sale for firewalls as memory shortages could push prices higher

Steven

No fire sale for firewalls as memory shortages could push prices higher

Summary

Research firm Wedbush warns that a global DRAM shortage will drive up the bill-of-materials for next‑generation firewall appliances in 2026, squeezing vendor margins and pushing higher prices onto customers. Fortinet, Palo Alto Networks and Check Point are flagged as particularly exposed; SEC filings and recent earnings calls show falling product gross margins year‑on‑year. Palo Alto may be better positioned after front‑loading inventory, while Check Point has already applied price increases to soften the impact.

Market watchers report steep recent DRAM price rises — TrendForce cites a 55–60% quarter jump and Korean producers are said to be planning further hikes that could double memory costs year‑on‑year by mid‑2026. The shortages and price spikes are expected to affect firewall buildouts and supplier profitability as the year progresses.

Key Points

  • Wedbush warns DRAM shortages will increase firewall hardware costs and pressure margins in 2026.
  • Fortinet, Palo Alto Networks and Check Point are named as the most exposed vendors for memory‑hungry appliances.
  • Palo Alto may absorb some impact after front‑loading DRAM inventory; Fortinet reported falling gross margins and guided lower for the next quarter.
  • Check Point has already implemented price rises to offset DRAM cost increases.
  • DRAM prices surged in 2025 and could rise further in 2026 — reports suggest combined increases might double memory costs year‑on‑year.
  • Higher memory prices will likely be passed to buyers, affect procurement planning, and favour vendors with stronger inventory or pricing power.

Why should I read this?

Short version: if you buy, sell or spec network security kit, this is one to read. Memory shortages aren’t a tiny supply hiccup — they can balloon appliance costs and bite into vendor margins. Expect pricier firewalls, potential delays and a bit more hard bargaining next time you renew or expand your perimeter kit. We’ve saved you the digging: budgets and procurement plans need a rethink.

Source

Source: https://go.theregister.com/feed/www.theregister.com/2026/01/12/no_fire_sale_on_firewalls/