Apple Confronts Memory Shortage as AI Demand Squeezes Chip Supply
Apple, the tech giant behind iPhones and other consumer electronics, is facing a severe memory shortage due to skyrocketing demand from artificial-intelligence data centers. These AI customers are buying up an ever-larger share of global chip capacity, leaving smartphone manufacturers like Apple struggling to find conventional DRAM supply at elevated prices.
The shortage has led to a significant increase in memory prices, with some smartphone-memory prices more than quadrupling according to reports. Samsung, SK Hynix, and Micron together command around 90% of the global memory market, giving them considerable power over where production capacity is directed.
Apple's enormous purchasing power provides some leverage in negotiations with suppliers, but even a company of its scale cannot conjure new fabrication facilities overnight. The financial stakes surrounding this supply squeeze are considerable, with Apple's latest figures showing $54.25 billion in iPhone revenue, representing 49.6% of quarterly sales.
The shortage is also a reflection of the broader semiconductor industry dynamic, where AI infrastructure spending is systematically crowding out supply chains that traditional consumer electronics manufacturers have long relied upon.