The tech world has recently been abuzz with intense discussions about the sharp rise in memory chip prices, and the fundamental question on everyone's mind is: how will this affect the prices of the upcoming iPhone and the rest of Apple's products?
For those unfamiliar with the details of the crisis, prices for DRAM and NAND memory chips have seen consecutive price hikes due to overwhelming demand from companies building AI servers. Reports indicate that Nvidia has surpassed Apple to become the largest customer of global chipmaker TSMC as a result of this surge, despite record iPhone sales in the last quarter.
Demand for memory chips used in artificial intelligence servers has reached levels that even major manufacturers like TSMC, Samsung, and SK Hynix are unable to meet, despite their factories operating at full capacity. This supply-demand imbalance has given manufacturers justification to raise prices. Taiwanese research firm TrendForce estimates that prices for traditional DRAM memory contracts could rise by 90% to 95%, while NAND memory prices could jump by 55% to 60% this quarter compared to the previous quarter.
Although Apple wields enormous influence as one of the world’s largest electronics manufacturers, it is not entirely immune to these market fluctuations.
In an earnings call last week, Apple CEO Tim Cook acknowledged that rising chip prices would have a “slightly larger impact” on the company’s gross profit margin this quarter. However, Apple still expects revenue growth of 13% to 16% year-over-year. Cook stated that Apple would consider a range of options to address these price increases if necessary, without disclosing any specific plans.
Despite the rapidly evolving situation, it currently seems unlikely that Apple will directly raise iPhone prices for several reasons:
Strong profit margins, with Apple expecting its overall profit margin to remain strong between 48% and 49%, meaning it can absorb a portion of the costs at present.
Pressure on suppliers, as the Taiwanese newspaper DigiTimes reported that some suppliers expect Apple to intensify its demands for cost reductions in the future, either from the chip suppliers themselves or by negotiating better deals with other component suppliers to make up the difference.
Historically, Apple's pricing policy is characterized by its extreme sensitivity to passing on direct price increases to the customer, relying instead on its superior management of supply chains.
In this context, renowned supply chain analyst Ming-Chi Kuo recently stated that Apple's current plan for the iPhone 18 Pro models is to "avoid raising prices as much as possible." He predicted that Apple will at least maintain a stable "starting price," suggesting that the upcoming models will not cost more than the current iPhone 17 Pro models.
However, Kuo specifically referred to the “starting price,” leaving the door open for the possibility that Apple will raise the prices of storage upgrade options, which are already expensive compared to the actual manufacturing cost.
It is noted that the increasing demand for HBM (High-Band Wideband Memory) used in AI graphics processing units has depleted a large portion of the production lines that were dedicated to consumer device memory, creating a global shortage crisis that has prompted companies to try to secure their stock at double the price to ensure continued production.
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