Flash chipmakers regain leverage over Apple as AI demand lifts prices

what happened

The Wall Street Journal reports that demand from large AI operators has nearly quintupled flash memory prices over the past year, according to research firm TechInsights. Apple, the world's biggest buyer of these chips, once set terms for suppliers such as Japan's Kioxia. Now the balance has shifted, as Meta, Microsoft and Amazon sign long-term contracts committing to higher prices.

The Journal's analysis found that Apple earned an average gross profit above 80 cents on every dollar charged for extra storage in iPhones and iPads. An extra 256 gigabytes that cost Apple $15 has since risen to about $66. The company has already raised prices on nearly all its products, by 13% on average for iPhones.

Apple said it values its long-standing supplier partnerships and looks forward to continuing that work together.

why it matters

For markets, this points to a shift in power within semiconductors: higher memory prices support flash makers while device companies face margin pressure. The key question for Apple is whether consumers will respond by keeping their phones longer.

market impact

Apple: costlier memory squeezes margins, while flash chipmakers benefit from higher prices

• ▼Apple pressure down — higher memory costs threaten to compress margins on extra storage
• ▲Kioxia pressure up — new long-term contracts at higher prices protect its profits
• ▲Flash memory prices pressure up — demand from AI data centers is outpacing supply

tags

instruments