As memory components dominate material costs for the upcoming iPhone 18, industry watchers warn that supply chain disruptions and rising prices could lead to higher prices and reduced smartphone output, reshaping the premium and mid-range markets.
Memory is emerging as the sharpest pressure point in the next iPhone cycle, according to TrendForce, which estimates that it will make up 34% of the bill of materials for the iPhone 18, up from 10% in last year’s iPhone 17. The research firm says that share could rise to 42% in the first half of 2027, underscoring how rapidly component economics are shifting as chip and memory costs climb. That marks a change from the period when the application processor and display were the main cost drivers.
The strain is being amplified by the AI boom, which has tightened supply across DRAM and NAND markets as chipmakers prioritise higher-margin server demand. TrendForce and other industry watchers have said that memory prices have risen sharply, with some forecasts pointing to steep increases in contract pricing in early 2026. For Apple, that creates a difficult trade-off: absorb more of the cost and protect volumes, or push through higher prices on some models to preserve margins.
Reports from supply-chain sources suggest Apple is already trying to contain the damage. Macworld reported that the company has pressed Samsung and LG to cut prices for panels used in the 2026 iPhone 18 Pro Max, even as suppliers cope with more demanding OLED production requirements. At the same time, Tom’s Hardware reported that Apple may be dealing with a packaging bottleneck for chips linked to DRAM shortages, which could complicate the ramp-up of the iPhone 18 family. Apple is also said to be examining alternative memory suppliers, including China’s CXMT, although that option carries political and regulatory risk.
Analysts differ on how much of the cost shock Apple will pass on. Ming-Chi Kuo has suggested the company could keep entry-level iPhone 18 pricing steady while raising prices on higher-end variants, using its supply-chain leverage to absorb some of the pressure. Other reports indicate the company may lean on older models to protect margins if new devices become more expensive to build. TrendForce expects the wider effect to be felt beyond Apple, warning that Android makers with thinner margins could be forced to cut low-end and mid-range models that no longer generate acceptable returns. It says global smartphone output is likely to stay under downward pressure through 2027.
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