"Even the 'biggest customer' has yielded! Korean media reports that Samsung and SK Hynix supplied DRAM to Apple in the first quarter at prices double those of the previous quarter."

"Even the 'biggest customer' has yielded! Korean media reports that Samsung and SK Hynix supplied DRAM to Apple in the first quarter at prices double those of the previous quarter."

Samsung Electronics and SK Hynix have recently succeeded in raising the prices of low-power DRAM supplied to Apple by nearly double compared to the previous quarter, marking that one of the world's largest smartphone manufacturers has had to accept significant price hikes amid a tight memory supply situation. Analysts believe this price adjustment breaks Apple's long-standing practice of relying on its market position to obtain cheap memory, highlighting the severity of the current supply-demand imbalance in the memory market. On January 27, according to the Korean media outlet zdnet, **Samsung Electronics proposed to Apple a first-quarter LPDDR chip price increase of more than 80%, while SK Hynix’s increase was about 100%.** Last year, Apple shipped about 250 million iPhones, making it a key customer for LPDDR. The report states that the surge in memory prices stems from a sharp increase in DRAM demand driven by aggressive AI infrastructure investment by global tech giants, while suppliers have shifted production capacity to HBM (high bandwidth memory), exacerbating the shortage. **Market research firm TrendForce predicts that general DRAM prices will rise 55-60% quarter-on-quarter in the first quarter.** Reportedly, industry insiders reveal that Apple generally signs long-term supply agreements for memory every year, but considering the current memory crisis, it only completed price negotiations for the first half of this year. With the release of new products such as the iPhone 18 in the second half, prices may rise further. After this news was released, SK Hynix and Samsung Electronics’ gains further expanded in the afternoon, with SK Hynix rising over 8% and Samsung Electronics nearly 4%. Supply Tightness Forces Apple to Accept Big Price Hikes Samsung Electronics and SK Hynix achieved notable results in negotiations with Apple in this year’s first quarter. The report pointed out, **according to Korean industry sources, Samsung Electronics proposed an LPDDR price increase of more than 80%, and SK Hynix’s increase reached around 100%. This is the first time that Apple, as a major customer, has accepted such a large price adjustment in a short time.** It is known that LPDDR is a type of memory that focuses more on energy efficiency compared to standard DRAM and is essential for IT devices including smartphones. The seventh-generation LPDDR5X is currently the most widely used. With about 250 million iPhones shipped annually, Apple has long been a key buyer in the LPDDR market. The report noted that despite the large price increase, the LPDDR price Apple pays is not the highest in the market. As a major player in the memory market, Apple has long leveraged its dominant position to procure LPDDR at prices lower than other companies. **Industry insiders believe that this round of negotiations has significantly narrowed the price gap between Apple and memory suppliers.** AI Demand Squeezes Traditional Memory Supply The root cause of the sharp rise in memory prices is a supply-demand imbalance. The report states, global tech companies' large-scale investment in AI infrastructure is pushing up DRAM demand, while suppliers such as Samsung Electronics and SK Hynix have focused production on higher-margin HBM products, leading to tighter supply of traditional DRAM and LPDDR. Market data shows that LPDDR5 prices rose about 40% in the fourth quarter of last year. TrendForce predicts that general DRAM prices will rise 55-60% quarter-on-quarter in the first quarter. An industry insider stated: > “The increase in the first quarter is even bigger, with an overall increase of at least 60%.” If Apple’s memory price increases are fully reflected, memory suppliers’ overall profitability in the first quarter is expected to further improve. For Samsung Electronics and SK Hynix, which experienced an industry downturn last year, this means DRAM business profitability will be maximized in the first quarter. Prices May Continue to Rise in the Second Half of the Year Unlike before, Apple this year only completed price negotiations for memory in the first half, instead of signing a full-year long-term agreement. A semiconductor industry insider explained: > “Apple usually signs long-term annual memory agreements, but given the recent memory crisis, from what I understand, they only negotiated prices for the first half of this year.” This change leaves room for further price increases in the second half of the year. The insider added: "With the launch of new products in the second half, prices may rise further." Apple is expected to release its latest flagship smartphone, the iPhone 18, in the second half of the year, when demand for LPDDR will surge. Analysis points out that signing short-term contracts reflects the current uncertainty in the memory market and also shows Apple’s weakened bargaining power under tight supply. For Samsung Electronics and SK Hynix, this means they could gain greater pricing leverage in the next round of negotiations in the second half of the year. Risk Warning and Disclaimer The market involves risks; investment needs caution. This article does not constitute personal investment advice and does not take into account individual users’ particular investment objectives, financial situation, or needs. Users should assess whether any opinions, viewpoints, or conclusions in this article fit their specific situation. Investments made accordingly are at one’s own risk.