Memory chip shortage tightens through 2028 as Apple, Qualcomm warn

Apple warned that "very significant" memory chip supply constraints threaten sales of its key devices, as a shortage through 2028 pushes DRAM prices up 13-18 percent and compresses margins across the semiconductor chain.

"We believe it will be unlikely to see any significant increase in incremental supply through 2028," Jaejune Kim, executive vice president of memory at Samsung, said on the company's second-quarter earnings call. "The supply constraints are expected to become even more severe in 2027 than 2026."

Qualcomm's fiscal third-quarter report showed the cost pressure in action. Revenue of $9.95 billion beat the $9.67 billion consensus, but QCT chip division margins fell to 26 percent from 30 percent a year earlier. Handset chip revenue dropped 20 percent to $5.09 billion. The company guided fourth-quarter adjusted earnings of $2.05 to $2.25 per share, below the $2.36 Wall Street consensus, with QCT margins projected at 23-25 percent.

The shortage is not just a smartphone problem. TrendForce expects server DRAM prices to rise 13-18 percent sequentially in the third quarter as manufacturers prioritize AI and data-center applications. AI-server builders face the same timing problem Qualcomm described: components appreciate faster than customer pricing, threatening gross margins even as revenue grows.

Apple's Supplier Search Won't Fix Pricing

Tim Cook said on Apple's Q3 2026 earnings call that adding suppliers would help improve availability but cautioned it would not necessarily allow the company to reverse recent product price increases. "Primarily, the DRAM market has three suppliers, and obviously, if there were more suppliers, that would be good, and it would help us on the supply side, and perhaps the pricing side. It's unclear on the pricing side," Cook said.

Apple has been campaigning publicly and behind the scenes to secure US government approval to procure memory from blocklisted Chinese suppliers CXMT and YMTC. The company reportedly plans to use memory from Chinese suppliers in devices sold outside the US, reserving components from existing suppliers for the American market. The move would improve both domestic and foreign device availability, but Cook's double-take on what additional suppliers would mean for pricing makes clear that recent price hikes may not be temporary.

Memory Inflation Reshapes the Premium Mix

Qualcomm CEO Cristiano Amon described the impact as an affordability and product-mix problem rather than a demand collapse. Memory inflation is forcing handset manufacturers to raise device prices, pushing consumers toward the "lower end of the premium" category or older models containing less expensive Snapdragon processors. A consumer who moves from the newest flagship to an older model may remain inside the premium market, but the phone is likely to contain an older and less expensive processor.

Qualcomm plans to raise product prices beginning September 1, reportedly by double-digit percentages, but the benefit will arrive gradually as contracts are renegotiated. Until then, supplier costs rise first and customer pricing follows later. The company expects QCT handset revenue from Chinese manufacturers to return to double-digit sequential growth in the fourth quarter, supported by improving Android demand despite a faster decline in Apple-related sales.

The read-through to AI infrastructure is direct. Companies like Super Micro Computer can report rising revenue and a growing order book while gross margin contracts because the memory and components required to fulfill orders are appreciating faster than customer pricing. Qualcomm shares fell 7.16 percent after hours on the earnings warning before recovering to close near $151.59 on Thursday.

For investors, the memory shortage creates a two-sided trade. Memory suppliers — Samsung, SK Hynix, Micron — benefit from pricing power and multiyear supply agreements. Downstream hardware vendors face margin compression until they can reprice contracts. Apple, trading at roughly 30x forward earnings, has already raised prices on several products, but Cook's comments suggest further increases may be necessary as the shortage extends into 2028.

This article is for informational purposes only and does not constitute investment advice.