iPhone 18 Pro production costs to jump 38%, TrendForce says

Apple ↘ 1.09% faces a dramatic increase in manufacturing costs for its upcoming iPhone 18 Pro, with new research from TrendForce estimating that the bill of materials for the 256GB model will rise approximately 38% year-over-year, driven primarily by surging memory prices.trendforce

The research firm, which published its findings on Monday, reports that DRAM now accounts for roughly 34% of the iPhone 18 Pro's total BOM cost in the third quarter of 2026 and is expected to exceed 40% in the first half of 2027. This represents a dramatic shift from a year ago, when memory comprised only about 10% of total component costs, and the application processor and display were the dominant cost drivers.trendforce

Memory Overtakes All Other Components

According to WCCFTech's analysis of the TrendForce data, by early 2027 the 12GB LPDDR5X RAM in the iPhone 18 Pro is projected to account for 42% of total BOM, while the A20 Pro chipset and OLED display will each represent just 9%. Counterpoint Research estimates that 1TB of NAND storage alone will consume $250 of total BOM, and when paired with DRAM costs, the combined memory expense could reach $400 per device.wccftech

TrendForce notes that memory prices have risen five- to sevenfold since the beginning of 2025, fueled by intense demand from AI applications straining global supply.trendforce

Apple's Pricing Dilemma

TrendForce expects Apple to follow the strategy it adopted for recent MacBook launches, absorbing part of the cost increase through lower gross margins to keep retail price hikes manageable and preserve shipment volumes. The company may also raise prices on older iPhone models alongside the new generation launch to partially offset rising memory costs.trendforce

The iPhone 18 Pro is scheduled for release in the third quarter of 2026, with a September keynote expected to reveal final pricing.wccftech

Broader Industry Impact

The pressure extends well beyond Apple. TrendForce warns that Android smartphone vendors, which operate on thinner margins, will likely need to pass through a larger portion of component cost increases to consumers, resulting in steeper retail price hikes than those expected for the iPhone. Entry-level and mid-range segments face particular risk, as already-thin margins leave little room to absorb higher costs. Some brands may be forced to discontinue product lines that have fallen into negative gross margins.trendforce

TrendForce expects global smartphone production to remain under downward pressure from the second half of 2026 through 2027 as persistently rising memory costs weigh on market demand.trendforce