MSFT · 10-K · 2026A · Full report

Supply Chain Constraints

MICROSOFT CORP · 2026-07-29 · Importance 29 · Surprise 24

Microsoft is expanding datacenter locations and server capacity to address increasing AI-service demand, requiring permitted land, predictable energy, networking supplies, servers, GPUs, and other components. Devices are primarily manufactured by third-party contract manufacturers, and Microsoft generally can use alternate manufacturers if a vendor becomes unavailable. However, some products depend on components supplied by very few qualified suppliers, creating risks of delayed datacenter operations and device manufacturing if disruptions persist.

Key facts

• Fiscal year 2026 cost of revenue for More Personal Computing decreased $1.8 billion or 7% driven by lower hardware sales. source