Apple just locked down its memory supply for the next wave of iPhones by cutting a huge deal with Samsung. With its old chip contracts running out and a serious shortage driving prices up, the company moved fast. Samsung is now set to provide most of the DRAM, somewhere between sixty and seventy percent, for both the upcoming iPhone 17 and next year's iPhone 18 families.
The choice came down to who could actually deliver. Even though Apple likes having multiple suppliers to keep costs down, Samsung seems to be the only one that can meet its intense technical demands at the required volume. Their chips are ultra-thin and meet strict power requirements that go beyond normal industry standards, which is critical for the advanced A-series processors. SK Hynix, another usual supplier, is reportedly focusing its factory space on a different type of memory used in AI systems.
This shortage is a massive payday for Samsung, with chip prices more than doubling this year. Their profits are expected to soar. Apple can probably handle the increased cost by placing gigantic combined orders for two years of phones and by making its own main processors. The move secures the special LPDDR5X memory the iPhone 18 will need for its boosted AI performance, but it also makes Apple more dependent on a single supplier than it typically prefers.
The choice came down to who could actually deliver. Even though Apple likes having multiple suppliers to keep costs down, Samsung seems to be the only one that can meet its intense technical demands at the required volume. Their chips are ultra-thin and meet strict power requirements that go beyond normal industry standards, which is critical for the advanced A-series processors. SK Hynix, another usual supplier, is reportedly focusing its factory space on a different type of memory used in AI systems.
This shortage is a massive payday for Samsung, with chip prices more than doubling this year. Their profits are expected to soar. Apple can probably handle the increased cost by placing gigantic combined orders for two years of phones and by making its own main processors. The move secures the special LPDDR5X memory the iPhone 18 will need for its boosted AI performance, but it also makes Apple more dependent on a single supplier than it typically prefers.
