Apple hoards DRAM to maintain iPhone prices amid chipflation

By Seongmin K for the Chosun Daily – By stockpiling memory chips and absorbing costs, Apple aims to capture market share as rivals face supply shortages.

Due to chipflation, Chinese companies, including Samsung Electronics, have inevitably raised smartphone prices, but Apple is pursuing the opposite strategy to expand its market share. Leveraging its long-established supply chain management capabilities, financial resources, and premium pricing power, the company aims to turn the current crisis into an opportunity for market expansion. By hoarding DRAM at premium prices to secure necessary supplies while cutting off competitors’ access, Apple is executing a calculated scorched-earth supply chain strategy.

According to the tech industry on the 27th, Apple began sweeping up mobile DRAM supplies that entered the market from early this month. Recently, Apple signed a mobile DRAM supply contract with Samsung Electronics, reportedly accepting the significantly higher prices proposed by Samsung without objection. Apple also finalized similar agreements with SK Hynix. The price of 12GB LPDDR5X used in smartphones rose from around $25 in early last year to $70 this year, and Apple has accepted this increase. Kim Sun-woo, a Meritz Securities analyst, said, “Compared to the past decade, when Apple was taken for granted as the buyer securing memory at the lowest market prices, this is a dramatic shift.”… Full article

Source: chosun.com