Apple has indicated that climbing memory chip prices are beginning to weigh on profitability in the current quarter, reflecting concerns raised by South Korean chipmakers redirecting production toward higher-margin memory chips used in AI workloads.
“We do continue to see market pricing for memory increasing significantly,” Apple CEO Tim Cook said Thursday during an earnings call when asked about the effect of the memory crunch on the company’s production plans for the year.
Cook noted that the impact on the holiday quarter ending December 31 was “minimal,” but he expects the current quarter to feel the effects more acutely. Apple’s need for memory chips is growing as demand for the iPhone 17 surges, particularly in China and India. He described demand for the device in the December quarter as “staggering,” though he declined to comment on whether Apple might raise prices in response to the limited supply of memory.
The warning aligns with statements from Samsung Electronics and SK Hynix, which together control roughly two-thirds of the DRAM market and supply major clients like Apple. The shortage of conventional DRAM chips has been exacerbated as chipmakers divert capacity toward high-bandwidth memory (HBM) for AI servers, while also remaining cautious about expanding production following overcapacity issues after 2017. Samsung has indicated that production growth will remain limited through 2026 and 2027.
Some manufacturers are already adapting to the higher memory prices. “Due to a recent surge in memory chip prices, PC and mobile customers are adjusting purchase volumes,” SK Hynix said on its earnings call. “Some customers are taking a more conservative approach to shipment plans or considering adjusting (memory chip) specification in their price-sensitive product ranges.”
Research firms IDC and Counterpoint now forecast that global smartphone sales could fall at least 2% in 2026, while the PC market is expected to shrink by at least 4.9%, reversing last year’s growth trends.
