Considered one of Apple’s reminiscence suppliers is making a large funding to develop chip manufacturing amid international shortages, but it surely will not make your subsequent iPhone any cheaper.
On Friday, SK hynix introduced that it has authorized a 54 trillion received ($38.3 billion) funding to construct two new semiconductor fabrication vegetation in South Korea.
The funding contains 35.2 trillion received ($24 billion) in the direction of the Yongin Y2 facility, which can produce high-bandwidth reminiscence (HBM) and next-generation DRAM merchandise. Building will start in 2027 and wrap up by 2029.
A 19.1 trillion received ($13.6 billion) funding will go in the direction of constructing the Cheongju M17 facility set to open in late 2028. The ability would function a NAND manufacturing base, geared towards enterprise SSD and AI inference storage.
SK hynix is without doubt one of the world’s largest reminiscence chip producers. It is one in all Apple’s key reminiscence suppliers and gives elements used throughout Apple’s lineup, together with the iPhone, iPad, and Mac.
Sadly, neither of those investments straight helps the typical Apple shopper. As a substitute, the brand new services are being constructed to serve high-growth AI and enterprise markets, not conventional shopper electronics.
Rockets and feathers
In fact, one might argue that by creating devoted services for rising enterprise merchandise, SK hynix might give itself respiratory room to fabricate consumer-grade merchandise.
And, perhaps that is true.
Even nonetheless, SK hynix’s funding is not going to resolve points anytime quickly. In any case, the vegetation aren’t even slated to open till late 2028 on the earliest.
We have mentioned it earlier than, and we’ll say it once more: that is going to worsen earlier than it will get higher.
At the moment, DRAM costs are edging as much as an untenable stage for even massive company buyer bases, with nothing to say of the typical shopper.
DDR-5 DRAM costs have very practically sextupled on common on the patron aspect. In February 2025, two 16GB sticks of DDR5-6000 RAM bought for about $100.
Current pricing is round $600.
We have most just lately seen the results as Apple elevated costs on most of its product lineup.
The rise wasn’t shocking. Inflation and provide chain points usually drive costs “up like a rocket,” particularly on consumer-level merchandise.
The market, bolstered by shoppers in any respect ranges dashing to purchase merchandise “earlier than they get any costlier,” stands to make a very good revenue. That’s, at the least, till folks genuinely cannot afford the prices.
And whereas we’ll possible see a drop in pricing attributable to elevated manufacturing and market correction, I would not count on it to be quick or dramatic.
As a substitute, costs will float “down like a feather.” Slowly, and sure in a sine-wave sample.
The purpose, because it usually is, is that uneven value transmission is an actual ache within the ass for the tip shopper.
There’s greater than provide and demand
World provide chain shortages are an actual factor. The growth of AI has put lots of stress on producers to maintain up with demand.
iPhone 17 Professional Max has been restricted by provide chain constraints
However let’s not level the accusatory finger purely at information facilities and common market shortage. There’s loads of blame to go round.
It is vital to do not forget that SK hynix is additionally one of many firms focused in a latest value fixing swimsuit.
The grievance facilities on DRAM, the working reminiscence utilized in computer systems, smartphones, tablets, servers and plenty of different digital units. Samsung, SK hynix and Micron dominate the worldwide DRAM market, giving them monumental affect over reminiscence provide.
Allegedly, Samsung, SK hynix and Micron shifted manufacturing capability towards HBM, which instructions a lot increased costs from AI firms. This shift has left DRAM provides dwindling throughout the tech trade.
And sure, firms are allowed to pursue extra worthwhile merchandise. However the true query is whether or not these firms coordinated the manufacturing choices or reached them independently.
Finally, no matter investments SK hynix makes proper now does not remedy the fast drawback. Suppliers have already bought their complete manufacturing capability of reminiscence at excessive costs via 2027.
