Apple faces significant financial pressure as rising RAM prices drive a $33 billion increase in the company's manufacturing bill over recent months. During Apple's November 2 earnings call, CEO John Ternus described the current price increases as “unprecedented.”
The company has attempted to mitigate these costs by utilizing lower-priced inventory, reducing expenses in other areas, and implementing retail price hikes on various products. Apple raised prices for several Mac and iPad models in June, followed by iPhone price adjustments in September. Despite these measures, the company expects memory purchases to become even more expensive through 2027.
Industry analysts suggest the pressure on Apple's margins will persist through the holiday season. Dave Nicholson, Chief Research Officer at the Futurum Group, noted that memory prices represent a growing pressure point for hardware pricing. Nicholson argued that the impact of these rising component costs is easier to quantify than the eventual returns on massive AI capital expenditures currently being made by other firms.
Major suppliers indicate the supply crunch is unlikely to resolve quickly. Samsung reported that memory demand is expected to far exceed supply as AI infrastructure expands, with its memory division seeing quarter-on-quarter price increases for DRAM and NAND flash. A senior executive vice president at Samsung warned that the supply shortage could extend to 2028 or beyond.
Other key suppliers are also reporting tight markets. SK Hynix has secured long-term agreements for more than half of its production capacity for 2027 and 2028, while Micron warned that supply shortages in memory and storage could take "considerable time" to improve.
