Samsung, SK Hynix warn of squeezed chip supplies for PCs, phones due to AI boom
- Apple faces profitability pressure from rising memory chip prices
- Samsung and SK Hynix warn of supply chain disruptions
- Global smartphone and PC sales expected to shrink due to chip shortage
SEOUL, Jan 29 (Reuters) – Apple (AAPL.O), said rising memory chip prices had started to pressure profitability in the current quarter, echoing warnings from South Korean chipmakers that are diverting production toward higher-margin memory chips that support AI workloads.
Apple CEO Tim Cook said on Thursday when asked on an earnings call about how the crunch was showing up in the company’s production plans for the year,
We do continue to see market pricing for memory increasing significantly,
While he said the impact of the memory shortage had “minimal impact” in the holiday quarter ended December 31, which is typically its strongest for sales, he expected it would have more of an impact in the current quarter.
Apple will likely need more and more memory chips as demand for its latest iPhone 17 has surged, especially in China and India. Cook called demand for the device in the December quarter “staggering,” but declined to answer a question from an analyst on whether Apple might raise product pricing because of the paucity of memory chips.
The comments come after warnings from Samsung Electronics (005930.KS), and SK Hynix (000660.KS), which combined control two-thirds of the DRAM chip market and count the likes of Apple as customers, that computer and smartphone companies were set to bear the brunt of a worsening shortage of DRAM chips used in their products. The consequences include growing margin pressure and potential supply chain disruptions.
The race to build AI infrastructure has prompted chipmakers to divert manufacturing capacity toward high-bandwidth memory (HBM) for AI servers, squeezing the supply of conventional DRAM chips.
Adding to the shortage is the fact that chipmakers, bruised by aggressive capacity expansion after 2017, have become more conservative about adding more production lines. This has contributed to the current supply shortage.
Samsung said such expansion would remain limited in 2026 and 2027.
As the crunch is set to persist, some manufacturers have already started adjusting their products to cope with the shortage and surging prices.
SK Hynix said on its earnings conference call on Thursday,
Due to a recent surge in memory chip prices, PC and mobile customers are adjusting purchase volumes,
“Some customers are taking a more conservative approach to shipment plans or considering adjusting (memory chip) specification in their price-sensitive product ranges.”
Research firms IDC and Counterpoint both now expect global smartphone sales to shrink at least 2% this year, reversing earlier forecasts for growth. The PC market is expected to shrink at least 4.9% in 2026, IDC estimated, after an 8.1% growth last year.
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Samsung, SK Hynix warn of squeezed chip supplies for PCs, phones due to AI boom, source
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