Apple faces higher storage costs as AI demand shifts suppliers’ leverage
TechInsights estimates show a smaller profit on an iPhone storage upgrade, while SK Hynix forecasts that the memory shortage will continue through 2030.
A memory chip shortage driven by AI data center construction has strengthened flash storage suppliers’ bargaining position with Apple, The Wall Street Journal reported. Apple has increased prices for more than a dozen products, attributing the changes to the shortage.
The increases cover products including iPhones, iPads, Macs, HomePods and Apple TV. Apple’s former CEO Tim Cook described higher prices as unavoidable, according to the report.
Apple’s earnings from storage upgrades have also declined, the Journal reported. Research firm TechInsights estimated a gross profit of US$134 on the US$200 upgrade from 256GB to 512GB for an iPhone 18 Pro. Its estimate for the equivalent iPhone 17 Pro upgrade was US$185.
The Journal described earlier procurement practices under which Apple sometimes declined deliveries after placing low-priced orders when flash prices were dropping. Suppliers were left with unsold inventory, including chips made specifically for Apple, according to the report.
An Apple spokesperson told the Journal that the company valued its longstanding supplier relationships and expected to continue working together. Separately, SK Hynix forecast on an earnings call that the memory chip shortage would last through 2030.
