The iPhone 18 will cost more, and the blame is (also) on Samsung

The global economic vocabulary has recently been enriched with a neologism that threatens to weigh heavily on consumers’ wallets: after inflation and the “shrinkflation“, the world now has to deal with what is defined as “chipflation“.

The prices of memory chips are reaching record levels, and, aided by a limited production capacity, the manufacture of advanced components has become an increasingly costly operation.

This wave of price increases is bound to spill over to final devices, not sparing even the giants of the sector. Among them is Apple, which now finds itself in an uncomfortable position: having to manage an increase in production costs imposed, ironically, by its historic rival and partner, Samsung.

Samsung memories cost more, not even Apple is safe

For years, Samsung has been one of the main providers of memories RAM LPDDR for the iPhone, alongside SK Hynix. However, recent reports from South Korea outline a worrying scenario for Apple: Samsung would have increased the price of LPDDR chips destined for Apple in the first quarter of 2025.

The increase is drastic, with estimates indicating a rise up to 80% compared to the previous quarter.

Although the figure seems exorbitant, the market situation is so tight that Samsung’s move appears even moderate when compared with SK Hynix, which would have imposed increases that reach 100%.

It is interesting to note how this perfect storm spares no one. Even the mobile division of Samsung Electronics, which produces Galaxy smartphones, is not immune to the problem, having to purchase memories from its own production division at market prices.

The end of long-term contracts?

Historically, Apple has always enjoyed an exceptionally strong negotiating position at the bargaining table. Thanks to its immense production scale and guaranteed sales volumes, Apple’s Tim Cook has always managed to secure extremely favorable deals for LPDDR chip supplies, locking prices for long periods.

However, the “chipflation” has shattered this certainty. The leverage of quantity is no longer sufficient to protect Cupertino from the record costs of raw materials and processing.

The volatility of the current market has radically changed suppliers’ strategies. Memory producers are no longer willing to sign long-term contracts that risk becoming uneconomical within a few months.

It is believed that both Samsung and SK Hynix have agreed to sign valid agreements only until the first half of 2026. This means Apple has lost its temporal protective shield: the company has very little room to maneuver to negotiate and remains at the mercy of market forces for the foreseeable future.

What to expect for the iPhone 18

The repercussions of these industrial dynamics will be felt strongly in the second half of the year, the crucial period during which Apple plans to launch the iPhone 18 lineup and, potentially, its first iPhone Fold.

If internal component costs continue to rise at this pace, the company will face a fork: erode its own profit margins or, much more likely, pass the extra costs onto the end user.

With suppliers refusing to lock prices beyond the short term, every single iPhone produced will cost more for Cupertino.