Apple expects memory costs to rise further in the December quarter, adding pressure to its hardware manufacturing expenses during a key shopping period. CEO John Ternus described the increases as “unprecedented” during the company’s November 2 earnings call. The report says Apple’s manufacturing bill has climbed by $33 billion in just a few months, though it does not specify how much of that increase is due to memory.

The company has so far softened the impact by using memory purchased at lower prices, reducing costs elsewhere and raising prices on some products. Apple increased prices on many Mac and iPad models at the end of June, then adjusted iPhone prices in September. Ternus said those moves partly offset higher costs, but the company expects memory purchases to become even more expensive in the December quarter and into 2027. Apple has not announced another round of price increases.

The supply squeeze is linked to strong demand for memory from AI data centers. Samsung, SK Hynix and Micron are benefiting from that demand, while manufacturers prioritize higher-margin server products and high-bandwidth memory. This is tightening availability of conventional DRAM and NAND flash used in consumer devices such as phones and laptops.

Apple’s suppliers have warned that the imbalance may persist. Samsung has said memory demand will far exceed supply as AI infrastructure expands, and its memory division reported higher average DRAM prices in the third quarter, alongside high-teen percentage increases for NAND. A senior executive at the company warned that the supply crunch could continue through 2028 and beyond. SK hynix said long-term agreements cover more than half of its production capacity for 2027 and 2028, while Micron has warned that shortages in memory and storage could take considerable time to improve.

The rising costs are not limited to Apple. Fairphone has reported that memory accounts for nearly 60% of the bill of materials for some of its phones. For Apple, memory is used across its hardware lineup, leaving several product categories exposed if higher prices persist. Dave Nicholson, chief research officer at the Futurum Group, identified memory costs as a growing pressure on Apple’s margins and hardware pricing through the holiday season and into 2027.

Sources: Tom's Hardware.