Apple inventory surges as memory chip costs climb further

Summarised from 4 outlets · Updated 3 Nov, 13:06 · Archive

Apple's inventory has jumped to $14.5 billion as the company faces unprecedented memory chip costs expected to keep rising.

Apple's inventory climbed dramatically in the fiscal fourth quarter, rising from $11.09 billion in the previous quarter to $14.54 billion, a jump of 31.1 per cent. Year-over-year, inventory grew 154.3 per cent from $5.72 billion in the same quarter a year earlier, driven largely by the company's stockpiling of memory chips.

CEO John Ternus said the company faces unprecedented memory pricing pressures. He told analysts on the earnings call that while Apple experienced higher memory costs in the September quarter, the December quarter would see even higher costs. Looking beyond December, Ternus said the company expects memory pricing to continue increasing.

Apple has taken several steps to manage these costs. The company implemented price increases on some devices including Mac and iPad at the end of June and iPhones in September. It has also benefited from lower prices on certain non-memory components. Manufacturing purchase obligations have increased by $33 billion from June to September, according to Ternus, suggesting aggressive pre-purchasing of key components before prices rise further.

Apple forecasts a gross margin of 45 to 46 per cent for the December quarter, down from 47.9 per cent in the September quarter, largely due to the memory cost impact. The company acknowledged that the benefit from carrying previously purchased inventory at lower prices will decrease over time. Chief Operating Officer Sabih Khan and Chief Financial Officer Kevan Parekh indicated the company is being 'thoughtful and deliberate' in its pricing approach, but when asked whether further price increases could come, Khan avoided offering a direct answer.

How it is being reported

• Apple's CEO John Ternus warns RAM cost increases are now 'unprecedented'Ternus has added to the chorus of warnings on the RAM crisis, cautioning that 'memory pricing right now is unprecedented' — and I fear the worst for 2027.TechRadar · 3 Nov, 13:04
• Apple's Mac business is booming, but the memory market has other plansNew CEO John Ternus toasts record sales as soaring RAM costs threaten supplies and squeeze marginsThe Register · 3 Nov, 12:27
• Apple Dodges Question on More Price Hikes as Memory Costs ClimbApple expects memory costs to continue to increase in the December quarter and beyond, CEO John Ternus said during today's earnings call . Ternus, COO Sabih Khan, and CFO Kevan Parekh all commented on Apple's struggle with memory. "What we're seeing with memory pricing right now is unprecedented," said Ternus. He said Apple saw higher memory costs in the September quarter, and the December quarter will be worse. "Looking beyond the December quarter, we see the pricing for memory purchases continuing to increase," he said. Apple was able to offset September costs by using memory it stockpiled…MacRumors · 3 Nov, 00:02
• Apple’s inventory surges 154% as memory chip costs climbApple says unprecedented memory chip costs will continue to rise, raising questions about future device prices as its inventory climbs to $14.5 billion.TechCrunch · 2 Nov, 23:04

In this story: Apple · John Ternus · Sabih Khan · Kevan Parekh

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