Soaring RAM costs are driving up prices across the tech industry, with Apple likely to raise iPhone prices due to supply chain issues and AI demand. The shortage of memory chips, known as 'RAMageddon,' has been exacerbated by the growing demand for high-bandwidth memory (HBM) in AI data centers. According to The Verge, memory prices have increased dramatically, with 16GB DRAM for smartphones rising from about $42 in the second quarter of 2025 to around $181 in the second quarter of 2026, an increase of more than 300 percent. These figures highlight how dramatically the component costs of building a high-end phone have changed.

The memory shortage is the result of a complex and very profitable reshuffling of the memory industry. Three manufacturers—Samsung, SK Hynix, and Micron—account for about 90 percent of the market, according to Counterpoint. The memory inside your phone or computer broadly falls into two buckets: DRAM, which temporarily holds the information a device needs while opening apps, loading webpages, or running software, and NAND flash memory, which provides longer-term storage for things like photos and files. Inside AI data centers, specialized processors rely heavily on a form of DRAM called high-bandwidth memory (HBM), which is more difficult to produce but also more lucrative to sell. Deep-pocketed AI chipmakers like Nvidia and AMD and tech giants like Meta and Microsoft have an insatiable need for it to power their AI systems and are more than happy to pay.

The incentives increasingly favor AI. Rather than guessing how many phones or laptops will sell a year from now, memory makers can lock in multiyear commitments from some of the world’s richest companies. Samsung’s executive vice president of memory, Jaejune Kim, said on the company’s last earnings call that they have been engaging in discussions with customers, prioritizing those who can guarantee committed future captive demand. AI is also increasing demand for conventional DRAM. Phone and PC makers want to run smaller AI models directly on their devices, requiring more sophisticated conventional memory—and more of it. Future models may need substantially more memory than their predecessors to support those capabilities.

The obvious solution is to make more memory. The problem is that it takes years to accomplish—even if you’re working fast. Micron is currently demonstrating just how much work 'more' entails. In July, the company poured the first concrete for its planned manufacturing complex near Syracuse in upstate New York. Once completed, the site will contain 2.4 million square feet of cleanroom space, making it the largest semiconductor manufacturing site in US history by that measure—and Micron’s largest facility anywhere in the world. Those cleanrooms where the chips are made will occupy only a fraction of the entire build, which is roughly the size of 350 football fields. Micron doesn’t expect meaningful output until 2030. Even on an accelerated timeline, the journey from permitting to production will have taken roughly six years.

Apple is perhaps the most revealing test case because it should be among the companies best equipped to withstand the shortage. Its scale gives it extraordinary leverage with suppliers, and its customers have historically proved willing to pay premium prices. Yet Apple has already raised prices across its lineup of Macs and iPads. Now attention is turning to the iPhone. Rather than releasing its full lineup at once this fall, Apple is expected to introduce the iPhone 18 Pro and Pro Max alongside its first foldable iPhone, while holding the standard iPhone 18 and refreshed Air until spring 2027. On Apple’s last earnings call, the company forecast slower growth due partly to worsening supply constraints, including for memory chips, and said higher memory costs had directly reduced its gross margin. Then-CEO Tim Cook described memory pricing as a '100-year flood,' citing 'exponential increases' that had caused Apple to raise prices.