Why Apple Is Sending Top Brass To South Korea Hotels Amid RAM Shortage War

Apple has sent senior procurement executives to South Korea and placed them in long-term hotel stays near Samsung Electronics and SK hynix facilities, underlining the severity of the global memory chip crunch facing future iPhones.

According to Korea Economic Daily, Apple is negotiating two- to three-year supply contracts for mobile DRAM, particularly 12GB LPDDR5X RAM expected to feature in upcoming iPhone models.

Rising Memory Prices Add Cost Pressure

The urgency is driven by sharply rising memory prices. A single 12GB LPDDR5X RAM module is now estimated to cost Apple around $70 per unit, a steep increase from earlier in 2025.

At Apple's production scale, even small component price hikes translate into billions of dollars in additional costs. Any failure to secure supply risks delayed launches, constrained availability, or forced hardware compromises.

Big Tech Competes for Limited DRAM Supply

Apple is not alone in the scramble. Dell, Google and other global technology companies have reportedly dispatched teams to the same South Korean chipmaking hubs, intensifying competition for limited DRAM output.

Memory suppliers are said to be prioritising large-volume customers while maintaining elevated prices, further strengthening their negotiating position.

AI Boom Squeezes Smartphone Memory

The primary driver of the shortage is surging demand for artificial intelligence hardware. Chipmakers have diverted capacity toward high-bandwidth memory used in AI servers, leaving less production for standard DRAM used in smartphones and laptops.

Impact on iPhone Pricing and Design Choices

Counterpoint Research estimates the DRAM crunch could raise a smartphone's bill of materials by up to 25%, pressuring margins and shipments across the industry.

While Apple's strong margins offer some protection, the situation highlights a clear reality: when memory supply tightens this much, even Apple has to negotiate from hotel rooms near factories-because without RAM, there are no iPhones.