Apple iPhone: DRAM crisis causes 350% higher RAM and NAND costs

The DRAM crisis currently seems unstoppable. As demand for DRAM and NAND from AI companies such as OpenAI continues to rise, memory prices have been increasing rapidly since last fall. The peak is apparently still a long way off. According to a new report by the Financial Times based on data from analysts at JPMorgan, memory is expected to account for around 45% of the production costs of an iPhone in 2027.

As a "Bill of Materials" analysis from 2024 shows, RAM and NAND flash memory were responsible for a total of 7 percent of production costs for the iPhone 15 Pro Max and iPhone 16 Pro Max. Apple paid around $17 for 8 GB of LPDDR5X RAM in 2024, while the company had to pay $22 for 256 GB of flash memory. For the iPhone 17 Pro ($1,094 on Amazon), Apple is currently said to spend around 10 percent of the total manufacturing costs on RAM and flash memory.

If these figures are accurate, the storage and memory costs for a single iPhone would rise from under $40 in 2024 to potentially over $250. As all the memory that can be produced is currently being sold anyway, Apple does not have a particularly strong negotiating position to cushion these rising costs, according to the Financial Times. Whether Apple will pass on these cost increases directly to customers or pay part of them itself through lower profit margins in order to gain higher market shares will become clear by the launch of the iPhone 18 series in September at the latest.