Apple is facing renewed cost pressure as its long-term DRAM supply contracts with South Korean memory makers approach expiry in January 2026, heightening concerns that higher component costs could spill over into its next generation of devices.
Overseas tech media reports that Apple, despite its trillion-dollar market capitalisation, has been unable to fully shield itself from tightening global component supply. The company is now expected to pay materially higher DRAM prices to Samsung and SK Hynix as suppliers reprice long-term agreements to reflect sharply rising spot-market levels.
Long-term DRAM contracts near expiry
Industry sources say Apple's long-term DRAM supply agreements (LTAs) with Korean suppliers are set to expire in January 2026. As memory prices surge and supply tightens, Samsung and SK Hynix are preparing to impose substantial price increases once those contracts lapse, aligning pricing more closely with current market conditions, according to Wccftech and industry sources cited by G-enews.
The shift marks a sharp reversal from recent years of oversupply and weak pricing. DRAM availability is tightening rapidly as suppliers prioritise higher-margin products, particularly advanced DDR5 memory for AI servers. Samsung has reportedly even rejected DRAM supply requests from its own Mobile Experience (MX) division to maximise profitability, further constraining general-purpose DRAM supply.
Product pricing exposure widens
If Apple is forced to absorb higher DRAM premiums from Samsung and SK Hynix, the cost pressure is expected to spread across a broad range of upcoming devices, including entry-level MacBooks, the M5 MacBook Air, the iPhone 18 lineup, a foldable iPhone under development, and OLED-equipped M6 MacBook Pro models.
Industry insiders say Apple may raise prices on some products, including iPhones, in the first half of 2026. Market research firms broadly agree that the memory shortage, largely driven by surging AI server demand, could persist through 2026, leaving device makers with limited ability to absorb higher component costs.
Apple's cost buffers under scrutiny
Despite mounting pressure, Apple retains two structural advantages that could soften the immediate impact: substantial cash reserves and extensive use of in-house silicon. Analysts note that Apple holds billions of dollars in cash, giving it the flexibility to absorb higher DRAM costs in the short term without immediately adjusting retail prices.
Apple's reliance on internally designed system-on-chips (SoC), including its A-series processors and custom modems such as the C1 5G chip, also helps offset component cost inflation. Estimates suggest the company has already reduced per-unit costs by around US$10 through deeper in-house chip integration.
Even so, industry observers caution that these buffers are unlikely to fully neutralise the impact of a sustained memory price surge. Rising costs are affecting the broader semiconductor ecosystem, with reports suggesting even Qualcomm and MediaTek may reserve LPDDR6 memory for next-generation flagship chipsets due to cost pressures.
Samsung's dual exposure to DRAM volatility
The tightening memory market is also complicating matters for Samsung, whose semiconductor and mobile businesses are pulling in opposite directions. While Samsung Electronics benefits as a DRAM supplier amid rising prices, its smartphone division faces growing cost pressure ahead of the Galaxy S26 launch in early 2026.
Amid soaring DRAM prices, Samsung Device Experience (DX) division head TM Roh is expected to meet Micron Technology CEO Sanjay Mehrotra during CES 2026 in Las Vegas, an unusual step that underscores the severity of the supply situation, according to CEOScore Daily. The talks are aimed at securing sufficient DRAM at acceptable prices for upcoming Galaxy smartphones as suppliers prioritise higher-margin customers.
The urgency reflects a broader market shift. DRAM spot prices have surged, with DDR4 8Gb average selling prices jumping from US$1.35 in January to US$8.1, a more than six-fold increase. Bank of Korea data shows that DRAM prices rose 28.1% month-over-month in October 2025, while NAND prices climbed 41.2%.
Inventory levels across the industry have fallen sharply. TrendForce estimates average global DRAM inventories at just 2.7 weeks in early the fourth quarter of 2025, down from 3.3 weeks in the previous quarter. SK Hynix and Micron are operating at around two weeks of inventory, while Samsung has fallen to about four weeks, well below the industry's typical six-to-eight-week comfort range.
Memory costs return to centre stage
With memory accounting for roughly 15-20% of smartphone and PC manufacturing costs — and that share rising — device makers are increasingly boxed in. TrendForce has warned that even highly profitable players such as Apple may need to reassess pricing strategies for new iPhone models, potentially reducing discounts on older devices or adjusting launch prices.
For Samsung, the challenge is particularly acute. The company has held prices steady for three consecutive Galaxy S generations since the Galaxy S23, but analysts now widely expect a price increase for the Galaxy S26 as memory costs surge. Any erosion of price competitiveness could complicate efforts to expand Samsung's Galaxy AI ecosystem in an increasingly crowded global smartphone market.
As Apple and Samsung navigate expiring contracts, depleted inventories, and unprecedented DRAM pricing power among suppliers, 2026 is shaping up as a year when memory once again becomes a central factor in consumer electronics pricing after years out of the spotlight.
Article translated by Levi Li and edited by Jack Wu
