Memory stocks sink as shortage squeezes Apple, Qualcomm

The global memory chip shortage is now showing up in the results of the biggest names in consumer tech. Apple CEO John Ternus called memory pricing "unprecedented," and Qualcomm ↘ 9.49% said a smartphone slump tied to memory costs cut its handset chip revenue by 26%. On Thursday, November 5, memory chipmakers including Micron Technology ↘ 17.46%, SK Hynix ↘ 13.40% and Sandisk ↘ 22.26% fell by double digits. Investors were weighing weaker device demand against an industry forecast that supply could stay tight until 2030.

Apple and Qualcomm feel the squeeze

Ternus led his first earnings call as CEO on Monday, November 2. "What we're seeing with memory pricing right now is unprecedented," he told analysts. He said December-quarter memory costs would be "even higher" and that prices would keep rising after that. Apple expects its gross margin to fall from 47.9% to between 45% and 46%, mainly because of memory. It also expects Mac and iPad supplies to stay limited. Apple had already raised Mac and iPad prices in June and iPhone prices in September. Its shares fell about 4% on Tuesday.cnbc.com+3

Qualcomm reported Wednesday, November 4. Its handset chip sales fell to $5.14 billion, short of estimates, as higher memory costs pushed phone makers to raise prices and hurt demand. The company blamed "industry-wide memory dynamics". Losing Apple as a customer also hurt. "We don't have a demand issue; it's a supply issue," CEO Cristiano Amon said. Qualcomm shares fell sharply on Thursday.247wallst.com+2

Memory stocks slide

The selloff spread across chip stocks on Thursday. The Philadelphia Semiconductor Index PHLX Semiconductor Index ↘ 12.13% fell to its lowest level since mid-April, while Sandisk dropped nearly 20% and Micron and SK Hynix fell more than 12% each. Higher device prices are causing "demand destruction" as consumers put off purchases, IBD reported. Micron also suspended plans for a plant in Taiwan because of a labor dispute.investors.com

The weak phone results were only one reason for the drop. The selloff began Wednesday after Democrats won the midterm elections, which raised worries about tighter rules on AI data centers. In Seoul, SK Hynix fell 9.46% and Samsung Electronics fell 7.57%, pulling down the Kospi.markets.businessinsider.com+1

A shortage that may last years

On October 28, SK Hynix said the memory shortage could continue until 2030 because advanced chips are harder to make and new factories take years to build. The company has signed long-term agreements with 14 major customers. Those deals lock in more than half of its capacity for 2027 and 2028. Investors are now asking how long consumers will keep paying higher prices for the phones and computers that use these chips.news.futunn.com+1