With an ecosystem of over 1.5 billion devices worldwide, Apple has historically enjoyed a heretofore unprecedented leverage with its supply chain partners. Yet, as the ongoing DRAM squeeze shows no sign of abating, Apple's leverage has largely become impotent, setting the stage for an atypical outcome where LPDDR5X modules are now dictating Cupertino-based tech giant's product roadmap and pricing.
Apple's per-unit costs for 12GB LPDDR5X modules are expected to have surged by $68.8 between the Q1 and Q2 of 2026
Apple used to secure memory chips via 1-year or even longer contracts, winning hefty discounts relative to the prevailing market price of the time. No longer. Apple now negotiates memory prices quarterly, with its focus shifting away from bargains to securing enough supply for its ever-expanding product portfolio.
Concurrently, DRAM prices have been on a relentless and unprecedented tear lately. SemiAnalysis reported towards the tail-end of Q1 and into Q2 2026 that LPDDR5 contract prices were hovering at around $10/GB ($120 for a 12GB LPDDR5X chip) at the time after undergoing a 3x increase since Q1 2025.
Since then, however, these pricing pressures have only become more extreme, with Sigmaintell now disclosing that the cost of an LPDDR5X 96Gb (12GB) memory chip has surged from $77.1 in Q1 2026 to $145.9 in Q2 2026, corresponding to an increase of $68.8 or 89 percent in a single quarter!
This aligns with a separate estimate from TechInsights, which disclosed recently that Apple is now likely procuring 12GB LPDDR5X memory chips at around $145 per unit.
It's hardly a surprise, therefore, that Apple is preparing for a sticker shock heading into Q3, and is laying the groundwork for increasing the prices of its iPhone 17 lineup, potentially as soon this month, with Tim Cook having already declared that price hikes have become "unavoidable."
This paradigm is now leading to an aberrant situation where commodity DRAM now entails a 15 percent higher operating profit margin for memory chip makers than what AI-focused High-Bandwidth Memory (HBM) modules entail. What's more, Daishin Securities now estimates that the operating profit margin on general-purpose DRAM could reach "a theoretical peak of 90% within the year."
Bernstein is also now echoing these profit margin projections, and does not expect commodity DRAM prices to peak until well into 2027. In the meantime, Apple's margins are in for a historic squeeze, one that is now spurring projections that Apple will price the base storage variant of its upcoming iPhone 18 Pro at an eye-watering ~$1,400, with the corresponding Pro Max variant possibly hitting the shelves at around $1,500!
About the author: Writing is my one incontrovertible passion. Over the past six years, he has authored over 2,200 distinct articles on financial and tech-related topics, spanning nearly 1 million words. And he has been a member of Wcctech mobile team since 2025. As an alumnus of the University of Toronto, Rotman Commerce Program, I bring nuance, in-depth knowledge, and a unique perspective to every topic that I cover. When I'm not writing, I'm traveling the world, exploring hidden confectionaries and restaurants as an aspiring food connoisseur.
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