Apple LPDDR DRAM Prices Surge Over 100% from Samsung and SK Hynix as AI Chip Shortage Ends Pricing Advantage

Samsung Electronics and SK Hynix negotiated LPDDR DRAM price increases exceeding 80% and approaching 100% respectively for Apple's first quarter 2026 iPhone memory supply, ending the tech giant's traditional pricing advantage as global AI infrastructure demand diverts production capacity toward high-margin chips.

Samsung proposed quarter-over-quarter price increases exceeding 80% while SK Hynix sought hikes around 100% for low-power DRAM supplied to Apple, according to ZDNet Korea citing industry sources. Apple reportedly agreed to both increases due to worsening memory supply tightness caused by surging demand for AI-focused components.

Apple has historically leveraged its position as the memory industry's largest customer to secure LPDDR at comparatively lower prices than competitors. The company sells approximately 250 million iPhones annually, giving it substantial negotiating power with Samsung and SK Hynix who dominate the LPDDR market.

However, current market conditions forced Apple to accept the broader industry price uptrend as memory suppliers prioritize high-bandwidth memory production for AI data centers over consumer electronics. The latest negotiations significantly narrowed the price imbalance that previously benefited Apple, though sources indicated the company still pays less in absolute terms than most other buyers.

LPDDR prices for Apple had already risen approximately 40% in Q4 2025, and with steeper Q1 2026 increases, supplier margins are projected to reach at least the mid-60% range or higher according to industry observers.

The memory shortage stems from a strategic reallocation of global silicon wafer capacity toward AI infrastructure rather than traditional consumer electronics. Samsung, SK Hynix, and Micron Technology are pivoting limited cleanroom space and capital expenditure toward higher-margin enterprise-grade components including HBM and DDR5 server memory.

"PC and mobile customers are having difficulties securing memory supplies, as they are being directly and indirectly affected by supply constraints and strong demand for server-related products," Park Joon Deok, head of DRAM marketing at SK Hynix, told analysts on the company's earnings call.

Producing one gigabyte of HBM consumes three times the wafer capacity of standard LPDDR5X memory found in high-end smartphones. By 2026, AI is expected to consume over 20% of global DRAM wafer capacity, with Microsoft and OpenAI's Stargate project potentially requiring 40% of worldwide DRAM output to function at peak capacity.

Adding to supply constraints, chipmakers remain conservative about adding production lines after suffering massive financial losses during the 2022-2023 oversupply period. Samsung indicated capacity expansion would remain limited in 2026 and 2027, while Micron's new Idaho fabrication facility won't be operational until 2027 and its Hiroshima plant won't produce output until 2028.

SK Hynix has sold out its entire memory chip capacity through end of 2026. The three major manufacturers are focusing $54 billion in capital expenditure primarily on research and development for AI chips rather than aggressive capacity expansion.

TrendForce expects general-purpose DRAM prices to increase 55-60% in Q1 2026, with some product categories nearly doubling. Server DRAM prices are projected to rise over 60%, while consumer DRAM and NAND face comparable increases.

Reports indicate Apple's current 12GB LPDDR5X memory chips now cost approximately $70 per unit, marking a roughly 230% increase compared to early 2025. The steep cost pressure prompted executives from Google and Dell to travel to South Korea to secure sufficient DRAM supply.

Apple typically enters annual long-term memory supply agreements, but reflecting the recent shortage, current negotiations concluded only through the first half of 2026. The company is preparing for extended negotiations to secure a new three-year agreement as existing contracts expire.

Samsung's mobile business profit slumped 10% in Q4 2025, with executive Cho Seong warning of a "challenging year" in 2026 expecting flat global smartphone shipments and downward adjustment risks due to memory chip prices. Industry analysts warn budget smartphones may return to 4GB RAM from 8GB in 2026 as manufacturers struggle with profit margins.

IDC forecasts the memory shortage could persist well into 2027, with 2026 DRAM and NAND supply growth expected below historical norms at 16% and 17% year-over-year respectively.