[News] Apple May Prioritize High-End iPhones in 2H26 as Memory Costs Rise; Flags TSMC 3nm Tightness

Apple addressed concerns over potential memory shortages during its earnings call on the 29th, as Samsung and SK hynix are reported to be preparing price hikes for memory used in iPhones. According to ZDNet, Apple CEO Tim Cook said that memory costs had only a limited impact on gross margins in fiscal Q1, but warned that the effect is likely to become more pronounced in the second quarter.

The company forecast revenue growth of 13%–16% for the second quarter, topping market expectations, while gross margin is projected to stay broadly steady at 48%–49%. Even so, the report notes that analysts repeatedly voiced concerns over Apple’s longer-term profitability outlook.

Apple said it expects to maintain strong margins in the near term despite rising memory costs, supported by a richer iPhone 17 sales mix and growing services revenue. However, the second half of 2026 remains the main source of uncertainty, as DRAM inventories at suppliers such as Samsung Electronics and SK hynix are expected to stay tight through the period, as noted by ZDNet.

Speculation has also surfaced over whether Apple will increase prices for its next-generation iPhones. According to the report, Cook declined to address the issue directly, saying he did not wish to comment on the matter

Apple Reportedly Prioritizes Premium iPhones as Memory Costs Rise

Meanwhile, sources cited by Nikkei say Apple is prioritizing the production and shipment of its three high-end iPhone models slated for 2026, while delaying the standard version, as the standard iPhone 18 may now be planned for the first half of 2027.

The report indicates that Apple is prioritizing the rollout of its first-ever foldable iPhone, alongside two non-folding flagship models featuring upgraded cameras and larger displays, for its major launch in the second half of 2026. The move is aimed at allocating resources more efficiently and maximizing revenue and margins from premium models as memory chip and other material costs continue to rise.

Apple Says TSMC Capacity Tightening Is Weighing on Production

Still, rather than focusing on memory constraints, Cook pointed to access to advanced-node manufacturing as the primary factor limiting Apple’s iPhone output, according to CNBC. He said production is constrained by capacity for the company’s A-series and M-series system-on-chip (SoC) processors, which are manufactured using TSMC’s 3nm. As noted by ZDNet, demand for this advanced node has surged in recent months, driven largely by AI-related chips, putting significant pressure on available manufacturing capacity.

Separately, the company also briefly addressed its in-house chip strategy. According to the earnings call manuscript on Investing.com, Cook said the strategy remains a competitive advantage when asked whether it could serve as a lever to support gross margins, but he stopped short of directly addressing how much it could offset pressure from rising memory costs.

Read more

• [News] Samsung May Raise iPhone LPDDR Prices by Over 80% QoQ; SK hynix Reportedly Near-100% Increase
• [News] TSMC Reportedly Expands WMCM Packaging for Apple, Capacity May More Than Double by 2027

(Photo credit: Apple)