Apple and Amazon both pointed to the sharp surge in memory semiconductor prices as a drag on earnings during their results announcements on the 30th (local time). It was a rare moment when the world’s largest customers, rather than the companies supplying semiconductors, publicly acknowledged the pressure of rising costs.
Immediately after the announcements, Micron rose about 4%, SanDisk about 7%, and Western Digital about 5% in after-hours trading on the New York Stock Exchange. SK hynix’s ADR, listed in New York, also climbed more than 6%. SanDisk and Micron had risen 430% and 212%, respectively, so far this year. Market watchers said the cost burden disclosed by customers was being absorbed as a factor that boosted expectations for suppliers’ earnings.
◆ Cook: “There are effectively three DRAM suppliers” … Korea’s dependence confirmed
Apple CEO Tim Cook said during the earnings call that memory procurement costs in the June quarter had risen noticeably from the March quarter.
“Looking ahead to the September quarter, memory costs will rise even more sharply,” he said. Cook added, “The DRAM market is effectively led by three suppliers,” and said that if more suppliers were added, it would help both the supply chain and pricing.
The three suppliers Cook referred to are Samsung Electronics, SK hynix, and Micron. Two of the three are Korean companies. Analysts say the remarks from the CEO of the world’s largest IT company confirm that even the largest technology firms cannot easily reduce their dependence on Korean semiconductor makers in the DRAM oligopoly.
Amazon CEO Andy Jassy said, “Cash capital expenditures in 2026 will be around $220 billion,” adding that “rising memory costs pushed up the earlier estimate of $200 billion.”
The additional $20 billion is equivalent to about 28 trillion won. Amazon spent about $53 billion on capital expenditures in the second quarter alone. It was an example of memory price fluctuations leading to revisions in the annual investment plans of a megacap company.
◆ It takes 3 and a half years to expand a fab … Samsung says shortages will last through 2028
The main reason for the supply shortage is the surge in investment in AI data centers. Generative AI runs in large data centers, and those servers consume massive amounts of memory.
In the industry, DRAM is likened to a desk where working materials are placed, NAND flash to a filing cabinet for storing materials, and HBM, or high-bandwidth memory, to a high-speed desk dedicated to AI.
The assessment is that as major cloud companies such as Amazon, Microsoft, and Google rush to expand data centers, demand has far outpaced supply.
Samsung Electronics said during its second-quarter earnings conference call on the 30th that “as demand that could not be met due to this year’s supply shortages gets pushed into next year, shortages will become even more severe in 2027 and continue into 2028.”
Kim Jae-jun, vice president of Samsung Electronics’ Memory Business Division, explained that “given the more than three-and-a-half-year period from building a new fab to wafer production, a major expansion in supply will be difficult through 2028.” This is interpreted as meaning that supply constraints, which are difficult to address through expansion, will continue for at least the next two years.
Changes in contract structure are also becoming visible. Samsung Electronics said it plans to tie 60% to 70% of total production capacity to long-term supply contracts. It has already signed contracts of up to five years with five major data center customers. The market, once characterized by ordering swings based on price fluctuations, appears to be shifting toward one in which customers secure multi-year volumes in advance.
SK hynix has continued to improve earnings by leading the HBM market, which has become an essential component for AI. In its second-quarter earnings announcement on the 29th, the company explained a system allowing conversion between its New York Stock Exchange ADR and its domestic shares, signaling an effort to broaden its global investor base. Analysts say the cost burden disclosed by Apple and Amazon is directly linked to the earnings outlook for the two Korean companies.
◆ Long-lasting supplier advantage may turn into upward pressure on consumer prices
The memory industry has traditionally been classified as a cyclical sector that alternates between booms and busts. When prices rise, expansion follows; when supply floods the market, prices plunge. This cycle has repeated itself over and over.
But analysts say the current phase is different.
The reason is that demand is not a one-off boost, but comes from multi-year AI infrastructure investment, while supply is in a period when it is physically difficult to expand.
Cautionary views also remain. In the U.S. stock market, semiconductor shares have at times corrected amid concerns that Big Tech AI investment may be nearing its peak.
Questions over whether large-scale investments will actually translate into profits remain unresolved, and the rise of Chinese competitors remains another variable.
Some say Samsung Electronics’ pushback against peak-cycle arguments during its earnings announcement was rooted in such doubts in the market, backed by its high share of long-term contracts.
The possibility of the burden being passed on to consumers is also being raised. Device makers, including Apple, have begun reflecting higher memory costs in product prices.
If memory input costs rise on smartphones and laptops, pressure to raise finished-product prices will also increase. The AI-driven semiconductor boom is clearly positive for Korea’s exports and corporate earnings, but it is also becoming a cost burden for electronics buyers, highlighting its dual nature.