iPhone 18 Pro Production Costs Surge Due to Memory Shortage

The bill of materials for the 256GB iPhone 18 Pro has increased by approximately 38% year-over-year, driven by a surge in memory costs. According to TrendForce, memory components now account for between 34% and 42% of the total build cost, surpassing the OLED display and application processor as the most expensive parts of the device for the first time in iPhone history.

Apple Inc. is experiencing these cost spikes because DRAM manufacturers Samsung, SK Hynix, and Micron have prioritized High-Bandwidth Memory for AI accelerators over the LPDDR5X memory used in smartphones. To manage these constraints, the company is scrambling to secure memory to complete the packaging of the A20 Pro chip produced by TSMC. Consequently, higher-capacity 1TB and 2TB models are expected to utilize slower QLC NAND flash storage instead of faster TLC NAND.

To protect shipment volumes, Apple may absorb a portion of these manufacturing costs by compressing its gross margins, similar to its recent MacBook pricing strategy. However, other reports suggest the company may either raise the retail price of flagship devices by an estimated $200 or increase prices on older models. These supply chain pressures coincide with rumors that the standard iPhone 18 may be delayed until early 2027, potentially concentrating consumer demand on the Pro models and increasing online order wait times.