The IT channel is living through a perfect storm of supply chain challenges in 2026: having weathered the supply constraints brought on by the Covid pandemic and subsequent shutdowns; now that the artificial intelligence (AI) market is booming, the market is being hit by new shortages as available stock gets snapped up. Rapidly rising costs add to the uncertainty in the market, while geopolitical tensions fuel the flames.
Being in the IT channel has never been an easy business, and 2026 has tested the resourcefulness of vendors, distributors and resellers alike as they are hit with multiple challenges.
South African distributors and resellers are operating in a complex supply environment, shaped by global component cost pressure, continued macroeconomic volatility, and strong demand for AI-related infrastructure and devices.
Yugen Naidoo, country GM and director of Lenovo South Africa, comments: “Memory and semiconductor supply have become more competitive as datacentre and AI demand have increased globally, which can influence availability and pricing across the broader technology ecosystem.
“For resellers, this means the need for tighter forecasting, earlier planning, and closer alignment with vendors and distributors to ensure customers receive the right solutions at the right time.”
Supply chain issues are arguably the biggest risk facing the local industry today, says Craig Brunsden, CEO of Axiz.
Among these challenges, he says, are higher oil prices sparked after the conflict in Iran which have hiked freight costs on both air and sea formats. Meanwhile, the usual issues around currency volatility or lack of forex availability in certain African markets hasn’t gone away.
But far the biggest shock over the past six months has been the steep rise in component input prices for PCs and, in particular, datacentre equipment, Brunsden points out.
“While the prices rising have been bad enough, the disruptive nature of limited vendor pricing windows has been very challenging to manage for distributors and reseller.
“Vendor price bids have limited validity dates and, if deals don’t close by these tight deadlines, the price of that piece of the deal simply goes up – so the deal needs to back to the beginning.”
This is particularly challenging in the public sector and enterprise market, Brunsden adds, since these customers’ procurement cycles don’t allow such short turn arounds.
“This means that resellers and distributors can end up funding the price hikes, or have to come up with some other creative funding proposals to close deals.
“It has been a bit messy to say the least.”
Michael Kan, brand executive at Mustek, agrees that volatile component costs and inconsistent supply availability are making planning and forecasting a challenge.
At the same time, geopolitical instability in the middle-East is also causing issues on certain product lines that are imported from that region, he adds.
Yesh Surjoodeen, MD: southern and central Africa at HP, points out that South African distributors and resellers face the added challenges of long logistics routes, fluctuating freight costs, limited availability of some configurations and currency volatility due to US dollar pricing.
“This can result in pricing uncertainty, shorter quotation validity and less predictable lead times,” he says.
Jamie Scott, director at Tarsus Distribution, says supply constraints and price increases have had a significant effect on the local channel.
“We have gone through multiple price increase over the last few months, with some laptops doubling in price. It’s been tough to manage,” he says.
To help counteract these effects, Scott says Tarsus has been holding significantly higher stocks of PCs and laptops, and has made efforts to average out the pricing rather than passing on every new increase.
“In terms of tight vendor allocations, this is a real challenge,” Scott adds. “Our vendors tend to prioritise the larger markets, like the UK and EU, along with large end user deals in those areas. So South Africa struggles for proper allocations and experiences very long lead times.”
He points out that this has been seen particularly in the reallocation of components used to manufacture higher-spec units that are more expensive. As a result, even the supply of entry-level units like Celeron-based laptops have dried up – traditionally a large portion of the South African market in retail and education.
“This gap in the market has been quickly filled by product coming in from China,” Scott adds. “So we are seeing a shift from the traditional brands, and are losing customers in this sector.”
Syntech was one of the first distributors to sound the warning about looming chip and memory shortages last year, and has been working hard to secure products.
Describing the situation as a bloodbath, Syntech CEO Craig Nowitz says the distributor has managed to line up sufficient stock – and a reasonable price point – to see out this year.
“We have been able to source enough stock for our PCBUiLDER assembly line to get us through Black Friday and the festive season,” he says.
“It hasn’t been great for our cash flow, but we will be able to offer solutions for our customers.”
Along with other industry players, Syntech has seen supplies of entry-level chips dry up, and the cost of other components rising dramatically.
However, between sourcing from non-traditional suppliers and buying up products on the open market, the company has secured runway for the next quarter.
Outlook for 2027
The picture is not going to get rosier any time soon
“Most vendors are expecting the prices to stop rising by the second half of 2027, but commentators are now projecting that prices won’t fall,” says Brunsden.
Prices will remain inflated as long as AI datacentres continue to invest, he adds. “Recent results by hyperscalers and AI providers suggest demand will increase, which then would support the theory that prices won’t fall until significantly until a lot more DRAM/flash supply hits the market.”
When that will be is still unknown at this stage – so we can expect prices to stay when they are. “And probably increase for at least another 12 months,” Brunsden believes.
Scott agrees with this assessment. “Initially I thought this was a bubble that would be done in six months, but it seems that it’s here to stay.”
His prediction is that we’ll face the same issue for at least for the next 12 months, and probably to the end of 2027.
Kan thinks 2028 is not too soon to expect a return to normal.
“It is uncertain,” he says. “Analysts have different views on when the constraints will stabilise. It could be 2028 before we see stability – and this does not necessarily include prices decreasing.
“However, most agree that the pricing increases we see from now going forward won’t be as drastic as it has been over the last three quarter – but cost increases are still inevitable.”
Surjoodeen is more optimistic: “While some market volatility is expected in the near term, conditions are anticipated to improve progressively as supply, logistics and market demand continue to stabilize.
“Recovery is likely to vary across product categories; early planning and flexibility can help organisations take advantage of opportunities as market conditions improve.”
The environment will almost certainly remain dynamic, says Naidoo. “Any easing is likely to be gradual rather than immediate, with the key being how quickly component supply, pricing and demand patterns stabilise globally.
“From Lenovo’s perspective, we are focused on building resilience rather than making short-term predictions. Lenovo has signed long-term component supply agreements, continues to diversify its global manufacturing footprint, and benefits from a broad sourcing strategy and a world class supply chain.”
Impact on resellers and customers
For resellers, the ability to close deals has been the biggest impact, says Brunsden.
“This includes having to manage software licenses to match tight hardware price deadlines, with unpredictable lead times contributing to project delays.”
Inconsistent pricing hits resellers and end users hard, says Kan.
“Quick decision-making is vital to ensure that their budgets can be adhered to. Long sales cycles will inevitably lead to lost opportunities, an inability to supply or budget overruns.
“Certain sectors with sales cycles that can span more than three months are particularly challenging,” he adds.
Scott has also seen orders getting cancelled due to long lead times.
“The most difficult part to manage is that price increases are being added directly to orders at factory. So if the goods don’t ship in a small window, and new costings come through, then the invoice from the factory is at the higher price.
“Going back to a reseller and telling them the price increased because the factory couldn’t make the units quick enough, and they need to go back to their customer and re-negotiate the purchase order, is not an easy conversation to have.”
For public sector orders it’s very difficult to change pricing significantly after an RFP is awarded, so a lot of these orders end up going unfulfilled. “With public sector entities very slow to react to any price increase, there could be two or more increases by the time some public sector entities react, so this has been very difficult to manage.”
One silver lining is the rand exchange rate, which has improves from over R19 to the dollar to around R16, Scott points out, “So some of the price increases have been diluted a little.”
The main impact is increased pressure on planning and project execution, says Naidoo.
“When component costs fluctuate or availability tightens, resellers may need to revisit budgets, timelines and configuration options with customers. This makes early engagement more important than ever,” he stresses.
“Customers want certainty, and resellers need clear visibility from vendors and distributors so they can manage expectations, avoid delays where possible, and recommend practical alternatives when required.”
With resellers contending with margin pressure, inventory risk and more frequent pricing changes, smaller partners are particularly exposed, says Surjoodeen.
“They have less capacity to absorb sudden cost movements or hold buffer stock.”
With customers facing budget pressures, project delays and the need to adjust specifications, early procurement and flexible planning can help reduce disruption, he adds.
Role of the vendor and distributor
There is very little distributors can do, other than work with resellers well in advance to ensure that price expirations are well understood and managed up the line with vendors, Brunsden says.
“Vendors are doing their best to accommodate the changes but, as this is a global issue, there is limited support possible.
“The key point to remember is this disruption is not a demand-side problem like we experienced during Covid. This is purely a supply-side problem, and the rising prices are in some cases causing projects to be completely cancelled or downgrade in scale.
“All of these issues require careful deal management between distributor and reseller,” Brunsden adds.
Some distributors are helping to manage the issue through stock-holding.
“We’re holding significantly more stock than normal, planning better and taking some risk on placing back-to-back orders earlier in the cycle to get stock secured at the quoted prices,” says Scott. “We use average costing so, as new stock arrives, the pricing is averaged up. We think that’s a better way to manage the prices rather than major increases on new stock.”
Kan laments that there isn’t much that can be done to alleviate the pressures of cost increases.
“Distributors and vendors are simply passing the cost increases on through the channel,” he says. “Other than ensuring that more stock is available on hand at pre-increase pricing, there is not much more that can be done. But this attracts its own additional costs for the distributors and vendors alike that will also be passed on to the channel.”
Vendors like HP use multi-site, multi-region and multi-source production to help adapt to a changing economic landscape, says Surjoodeen.
“Together with distributors, we are improving visibility, managing allocations, and providing alternative configurations where needed. Our focus is on transparency, forward planning, and flexibility.”
Lenovo also helps to support partners through a resilient global supply chain, close supplier relationships and stronger demand-driven execution.
“Our approach is to use our scale, global manufacturing footprint, and planning capabilities to improve visibility, align supply with customer demand, and help partners navigate changing market conditions,” says Naidoo.
“We also work closely with distributors to ensure resellers have clearer guidance on availability, suitable configurations and solutions that can meet customer requirements within realistic timelines.”