Apple Takes On-the-Ground Approach in Korea to Secure iPhone Memory Amid Supply Crisis

In January 2026, Apple took the unusual step of embedding its purchasing specialists and senior executives in South Korea for extended periods, effectively operating out of hotels near key semiconductor hubs. The move underscores the severity of the global memory chip crunch, which has sent DRAM and NAND prices soaring to unprecedented levels since mid-2025.

Apple’s primary goal is to lock in long-term access to LPDDR5X memory for future iPhone models. The urgency is evident in the cost escalation: a single 12GB memory package now costs the company around $70, representing a more than threefold increase compared to early 2025. To counter further volatility, Apple is pushing for two- to three-year supply agreements, an approach rarely pursued so aggressively in the consumer electronics space.

To strengthen its negotiating position, Apple’s teams have based themselves in Hwaseong and Pangyo in South Korea’s Gyeonggi Province—areas located minutes from fabrication and packaging facilities run by Samsung Electronics and SK Hynix, the world’s two dominant memory suppliers. The strategy allows Apple to conduct near-continuous, in-person negotiations rather than relying on periodic supplier meetings.

However, the suppliers are holding firm. Both Samsung and SK Hynix are resisting long-term, fixed-price commitments, favoring short-term quarterly contracts instead. Their stance is shaped by expectations that memory prices will continue rising well beyond 2026. Early indicators support this view: server DRAM prices in Q1 2026 are already 60–70% higher than in the previous quarter, and further increases are widely anticipated.

Apple’s predicament reflects a broader industry scramble. Technology giants including Dell, Google, and Amazon have reportedly dispatched their own senior procurement teams to South Korea, triggering what local businesses describe as a surge in “semiconductor tourism.” International hotel chains such as DoubleTree and Nine Tree are seeing sustained occupancy from executives effectively living on-site for weeks or months at a time.

At the heart of the shortage lies a structural shift in the memory market. Manufacturers are increasingly prioritizing high-bandwidth memory (HBM) and advanced server-grade components tailored for AI workloads, which deliver far higher margins than smartphone memory. This reallocation has sharply constrained supply for consumer devices, leaving companies like Apple competing fiercely for a shrinking pool of DRAM and NAND capacity.

— By Aaradhay Shama