Apple signs long-term NAND deal ahead of iPhone launch

Apple ↘ 0.28% has signed a multiyear NAND flash memory supply agreement as the company confronts a sharp escalation in component costs ahead of its product launch event later this week. The deal, first reported by South Korea's Economy Tribune and detailed by TrendForce, is aimed at ensuring adequate supply for upcoming devices, though it lacks a price cap and is not expected to fully resolve the pricing pressure Apple faces.trendforce+1

A 400% Surge in Memory Costs

The supply agreement comes as TrendForce data shows memory costs for the 256GB iPhone 18 Pro in the third quarter of 2026 are expected to be nearly 400% higher than a year earlier. Despite Apple's efforts to negotiate lower prices for other components, those savings are "unlikely to offset the resulting pressure on overall BOM costs," TrendForce said. Current estimates suggest Apple may raise the iPhone 18 Pro's retail price by around $100 compared with the iPhone 17 Pro, absorbing much of the increase rather than passing it on to consumers.9to5mac+1

Kioxia Seen as Likely Partner

While the counterparty, volume, and pricing terms of the new NAND deal remain undisclosed, market watchers cited by Economy Tribune have identified Japan's Kioxia as the likely partner. The two companies have a long supplier relationship. Earlier this year, Apple agreed to pay Kioxia double the previous rate for NAND starting in the first quarter of 2026, with pricing adjusted quarterly. A Morgan Stanley analysis in January noted that Apple had locked in NAND inventory through early 2026 at favorable prices under a prior Kioxia contract, but warned that renegotiation was imminent.x+3

Foldable iPhone Adds to the Crunch

The memory squeeze adds pressure to the launch of the iPhone Ultra, Apple's first foldable smartphone, expected to be unveiled at the company's September 9 event. Samsung Electronics and SK Hynix ↗ 7.05% are set to jointly supply roughly 70% of the device's 12GB LPDDR5 DRAM, with Micron ↗ 2.75% providing the remainder. A global DRAM shortage driven by AI demand has left roughly $1 billion worth of Apple processors idle at TSMC Taiwan Semiconductor Manufacturing Company Limited ↘ 0.83%, awaiting memory for advanced packaging. Analyst Ming-Chi Kuo has warned that Apple may produce only up to 8 million foldable iPhones by year's end, with availability tightly constrained at launch.macdailynews+5