Apple memory supplier expects price increases through at least 2030

Key Apple memory supplier SK Hynix has warned that RAM and flash memory shortages are likely to last through at least 2030, keeping product prices high.

Apple is believed to be one of 14 customers who have locked in priority orders, but the contract does not protect against price increases related to the balance of supply and demand …

The company says that while AI continues to drive demand and growth, there is little that can be done in the short to medium term to increase supply.

Supply, on the other hand, is not keeping pace with the growth of the market. Given technical difficulty of leading-edge processes and the long lead time required to build new production facilities, it expects the structure in which demand exceeds supply to persist through 2030.

The Register reports that SK Hynix has long-term deals with 14 tech giants for priority orders, but these allow for market-based price increases.

14 big buyers […] will collectively buy more than half of its output during 2027 and 2028, and some of them want to extend those agreements. The Korean giant doesn’t mind that because the deals include “a mechanism that reflects market conditions within a price range agreed upon with customers”

Apple is used to being in the driving seat when it comes to negotiating with suppliers, but this is not the case where memory and flash storage is concerned. Here, the shortages mean that it will have been forced to agree to contracts that allow significant price hikes in order to obtain guaranteed supplies.

Nikkei Asia also reports that printed circuit boards may be the next component to experience constrained supply. Once a humble commodity item, advances in the technology has turned them into specialist tech, with more layers and higher bandwidth requirements. The report says “that complexity shrinks the supplier pool and extends lead times.”

Apple said back in June that the company was doing its best to mitigate the price increases, but it has so far been unable to do so.

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