Apple is warning that it will not be able to build enough iPhones to match demand, as a global crunch in advanced processors and memory chips collides with one of its strongest upgrade cycles in years. The company is grappling with shortages of both its custom system-on-chip silicon and the DRAM that underpins new AI-heavy features, forcing it to rethink which models it prioritizes and how many units it can ship. The squeeze is part of a wider supply shock that is reshaping the smartphone market, lifting component prices, and testing how far consumers will chase premium devices in a constrained world.
Apple’s record iPhone cycle collides with a hard supply ceiling
Apple has told investors that demand for its latest iPhones is running ahead of what its factories can deliver, not because of weak planning but because it cannot secure enough cutting-edge chips. Executives have pointed to limited access to advanced node manufacturing for its A-series and M-series processors, produced by partners such as TSMC, as the main factor capping output of the current iPhone generation, even after a blowout quarter for hardware sales that surprised Wall Street expectations, according to Apple. In practical terms, that means some configurations and color options are already slipping into longer delivery windows, with retailers warning that popular storage tiers could be the first to run short.
On the company’s latest earnings call, Apple framed the problem as a structural bottleneck rather than a temporary logistics hiccup, stressing that the constraint lies in the number of advanced chips its suppliers can fabricate, not in assembly capacity. Chief executive Tim Cook has also acknowledged that rising memory prices are compounding the issue, since each flagship iPhone now carries significantly more DRAM to support on-device AI and camera processing, a trend that is magnifying the impact of the global memory crunch described by IDC. The result is a rare moment when the world’s most valuable consumer electronics brand is openly conceding that it cannot build as many of its marquee product as customers want.
A global memory crunch driven by AI, not smartphones
The shortages throttling Apple are rooted in a broader supply shock that began in 2024, when hyperscale data centers and AI developers started soaking up vast quantities of DRAM and NAND, leaving less capacity for phones and PCs. The 2024–2026 global memory supply shortage is now recognized as a distinct period of constraint, with chronic tightness in DRAM and flash affecting both consumer and enterprise PC markets, according to a detailed overview of the shortage. As chipmakers pivoted factories toward high bandwidth memory for AI accelerators, traditional mobile DRAM supply tightened, pushing up costs for smartphone vendors that rely on commodity parts.
Industry analysts say that dynamic has left less DRAM available for consumer devices, exacerbating price pressure in what was already a tight market, a trend highlighted in recent DRAM market analysis. Prices for memory shot up 50% in the last quarter of 2025 and are projected to increase another 40% to 50% by the end of the first half of 2026, according to a forecast on Prices for RAM. With Memory chips identified as a key component of artificial intelligence data centers that will remain in short supply through 2026 and 2027, according to a warning about Memory supply, smartphone makers like Apple are being forced to fight for scraps of capacity.
From Samsung to SK Hynix, suppliers signal a long squeeze
Apple’s predicament is not happening in isolation, and its suppliers and rivals are sounding similar alarms about the depth of the chip crunch. Major memory producers have told investors that AI demand is squeezing supplies of chips for PCs and phones, with companies such as Samsung and SK Hynix warning that capacity allocated to high bandwidth memory is crowding out more traditional products, according to recent comments from Samsung and its Korean peer. That shift is particularly painful for smartphone vendors that depend on a mix of commodity DRAM and custom processors, since both sides of the bill of materials are now under pressure.
At the same time, global electronics demand is softening, which might normally ease component shortages but in this case is being outweighed by the AI boom. Analysts tracking the sector say global demand for smartphones, personal computers, and game consoles is slumping in 2026 even as AI-driven chip demand drives a growing supply demand imbalance, a pattern described in a report on global electronics. By Al Mayadeen English, citing Source Agencies, the same analysis notes that AI accelerators are commanding premium pricing and long-term contracts, leaving consumer brands with less leverage to secure favorable terms on the DRAM and NAND they need for mass-market devices.
Apple pivots to premium iPhones and delays mainstream models
Faced with finite chip allocations, Apple is reshaping its 2026 iPhone roadmap to favor higher margin devices that can absorb surging component costs. According to Key Takeaways from a recent investor note, Apple (AAPL, Financial) plans to launch three premium iPhone models in 2026, including its first foldable iPhone, while delaying a new standard model that would have targeted more price-sensitive buyers, a strategy outlined in an analysis of Key Takeaways. Separate industry tracking notes that Apple Delays Standard iPhone for 2026 to Focus on Premium Models, with the company concentrating production and shipping on its three top tier iPhones that generate a significant portion of its sales, according to a breakdown of Apple Delays Standard. Another summary notes that Apple (AAPL, Financials) is going in a new way in 2026, prioritizing premium iPhones and delaying the standard model, a shift described in a market note that simply refers to the company as Apple.
The pivot extends beyond the core flagship line into niche products like the iPhone Air, which had been pitched as a lighter, design focused variant. In Nov, Apple decided it will not release the next version of iPhone Air as previously scheduled, according to a report that cited the Information and noted that the device would have dropped the physical SIM tray, supporting only eSIM connectivity, a detail captured in a dispatch on Nov. A follow up analysis titled Apple Delays Launch of Next iPhone Air Amid Weak Sales and Product Rethink, by Faizan Farooque, noted that Air Amid Weak Sales and Product Rethink was part of a broader effort to streamline the lineup while company finances are solid, a point underscored in a separate note on Apple Delays Launch. Together, these moves show a company choosing to funnel scarce chips into the most profitable devices, even if that means fewer options for mid range buyers.
Cook’s warning: shortages will shape Apple’s AI ambitions
Tim Cook has been unusually blunt that processor and memory supply constraints are limiting Apple’s flexibility just as it tries to position the iPhone as an AI-first device. In remarks flagged by multiple reports, he said that what is keeping Apple from making more iPhones is access to advanced node manufacturing for its A-series and M-series chips, and that the company is working closely with foundry partners to address that, comments captured in a detailed account of He said. The same briefing noted that Apple reported blowout first quarter earnings on Thu, yet still could not fully meet iPhone demand because of chip shortages, a paradox highlighted in a follow up that again stressed the company’s performance on Thu. Another account of the same call noted that Apple says it is not able to meet all the demand for new iPhones given current conditions, with Omar Gallaga reporting that Omar highlighted how memory prices and shortages are affecting the number of devices the company can build, as detailed in a feature by Omar Gallaga.
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