Garmin CEO signals possible price increases due to RAM crisis

What Garmin’s CEO said about costs and pricing

During Garmin’s quarterly earnings call, CEO Cliff Pemble addressed the company’s exposure to rising costs for electronic components, especially RAM, which has been affected by a global shortage. Pemble noted that while Garmin had previously stockpiled components at lower prices, the company is now facing 'significantly higher' costs for memory and other parts.

Pemble did not dismiss the possibility of price increases for Garmin’s products, stating that pricing is 'one of the things we can look at' to manage higher supply chain costs. However, he also highlighted Garmin’s vertical integration and diverse business lines as factors that could help offset some of these pressures.

Why the RAM crisis is impacting wearables

The RAM shortage stems from increased demand driven by AI and data center expansion, which has diverted supply away from consumer electronics. While wearables like Garmin’s devices have largely avoided significant cost increases so far, the crisis is now beginning to affect manufacturers.

Pemble’s comments suggest that the wearables market may no longer be insulated from these supply chain disruptions. Companies reliant on memory components could face difficult decisions about pricing, margins, or product features in the coming months.

How this compares to earlier supply chain challenges

Garmin previously navigated higher supply chain costs during tariff-related disruptions over a year ago. At the time, the company leveraged its vertical integration and diversified business to absorb costs without passing them on to consumers. However, the RAM crisis presents a different challenge, as it is driven by structural shifts in demand rather than trade policy.

This situation mirrors broader trends in the technology hardware industry, where rising component costs are becoming a persistent issue. For instance, Apple’s recent product launches, including the Apple Watch Series 12 and Ultra 4, may also face similar pressures, though the company has not yet signaled pricing changes.

What this means

Lazyfounder analysis — our interpretation, not reported fact.

Garmin’s warning about potential price increases is a signal for founders and operators in the wearables and consumer electronics space to closely monitor component costs. The RAM crisis is not just a temporary squeeze—it reflects deeper changes in the semiconductor market, driven by the rapid expansion of AI and data centers. For startups, this could mean reevaluating supplier contracts, exploring alternative components, or even adjusting product roadmaps to prioritize features less dependent on high-cost memory.

Garmin’s ability to mitigate some of these costs through vertical integration and a diversified portfolio is notable. Hardware startups without similar scale or integration may face steeper challenges, particularly if they lack long-term contracts with suppliers. This could also accelerate consolidation in the wearables market, as smaller players struggle to absorb rising costs.

Key takeaways

• Founders in wearables and consumer electronics should anticipate potential cost pressures from electronic component shortages, particularly RAM, which could impact pricing strategies.
• Garmin’s vertical integration and diverse portfolio may help mitigate some of these costs, offering a possible model for other hardware startups facing similar challenges.
• Competitors like Apple may also face these cost pressures, which could influence market pricing trends for smartwatches and other wearables.

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