Flash storage suppliers once bullied by Apple are now 'getting their revenge' due to a severe memory chip shortage driven by AI data center demand. As the iPhone grew, Apple became the world’s largest flash buyer, using its leverage to demand rock-bottom prices, refuse deliveries when prices fell, and force suppliers like Kioxia and Sandisk to open their books. Former procurement head Tony Blevins allegedly threatened a Sandisk executive, saying he’d make the CEO 'crawl on his knees' back to Apple.
Now, hyperscalers like Microsoft, Amazon, Meta, and Google are buying double Apple’s flash share. The shortage has forced Apple to raise prices on over a dozen products, including iPhones, iPads, and Macs. Profit margins on storage upgrades have dropped—for example, gross profit on a $200 iPhone 18 Pro upgrade fell from $185 to $134.
SK Hynix forecasts the shortage will last through 2030. Apple stated it values supplier partnerships and looks forward to continued collaboration.
Source: MacRumors · Summarized by HeadlinesBriefing