Memory Costs Account for Nearly 50% of Smartphone BOM, Yet Apple Stays Protected for Now

In a surprising development, TrendForce has revealed that memory costs associated with smartphones are escalating at an alarming rate, now representing nearly half of a smartphone’s Bill of Materials (BOM).Despite this trend, Apple appears to be relatively shielded for the moment, thanks to a series of strategic cost management measures.

Memory Costs Surge: From 10-15% to 30-40% of BOM

The latest report from TrendForce indicates that the price for a standard 8GB+256GB memory configuration has surged by almost 200% year-over-year in the first quarter of 2026, which marks a nearly threefold increase compared to the same period last year. This significant rise has propelled memory costs from a historical range of 10% to 15% of a smartphone’s BOM to an alarming 30% to 40%, edging closer to the 50% threshold.

As a result of these rising costs, TrendForce forecasts that smartphone production may decrease by 10% year-on-year in 2026, translating to approximately 1.135 billion units. However, the scenario could worsen, with potential declines exceeding 15% under more adverse conditions.

Importantly, the report emphasizes that “Apple, holding the top market position, is better equipped to manage escalating memory costs.”This resilience stems from Apple’s higher proportion of premium models and a customer base more willing to absorb price increases, which stabilizes production activities.

Recent supply chain insights from Jeff Pu, an analyst at GF Securities, reveal that Apple has already taken steps to mitigate potential price hikes for the upcoming iPhone 18 models. Notably, Apple is poised to bifurcate the launch of the iPhone 18 lineup, introducing the Pro and Pro Max variants this fall, followed by the more affordable iPhone 18 and iPhone 18e models in the spring of 2027. This strategy aims to alleviate cost pressures stemming from limited DRAM availability and the high expense of the advanced 2nm-based A20 chip.

According to GF Securities, Apple’s strategy is to maintain the starting prices for the iPhone 18 Pro and Pro Max at levels comparable to their iPhone 17 predecessors. This implies an expected launch price of approximately $1, 099 for the iPhone 18 Pro, while the Pro Max is anticipated to retail around $1, 199.

In addition, TrendForce suggests that “Huawei is likely to experience the least impact on production under the worst-case scenario, potentially leading to growth contrary to the industry’s general trend.”The report attributes this projected resilience to Huawei’s robust brand loyalty and unique position within the Chinese market.

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