Apple faces rising memory costs as demand for iPhone 17 surges, driven by strong sales in China and India.
Apple has warned that rising memory chip prices are beginning to pressure profitability in the current quarter, reflecting broader supply challenges as South Korean chipmakers prioritise AI memory production. CEO Tim Cook said that market pricing for memory continues to increase significantly, and while the impact was minimal during the holiday quarter ending 31 December, it is expected to weigh more heavily in the current period.
Demand for Apple’s latest iPhone 17 has surged, particularly in China and India, prompting the company to secure increasing quantities of memory chips. Cook described December quarter sales as “staggering,” but did not comment on whether Apple might raise product prices in response to supply constraints.
The warnings follow statements from Samsung Electronics and SK Hynix, which together control roughly two-thirds of the global DRAM market, indicating that computer and smartphone makers will face the brunt of a worsening DRAM shortage. The diversion of production towards high-bandwidth memory for AI servers is squeezing conventional DRAM supply, exacerbated by chipmakers’ cautious approach to capacity expansion after previous overproduction cycles. Samsung has said limited expansion is expected through 2026 and 2027.
Some manufacturers are already adjusting shipments or altering product specifications to manage costs, according to SK Hynix. Research firms IDC and Counterpoint now expect global smartphone sales to fall at least 2% in 2026, reversing earlier growth forecasts, while the PC market is projected to shrink around 4.9% after growing 8.1% last year. Analysts say margin pressures and potential supply chain disruptions are likely to persist as memory shortages continue.
