Memory prices squeeze Apple as Mac sales set a record and Huawei pushes buyers to the grey market

Apple's fiscal fourth-quarter call on Monday was the first since John Ternus took over as chief executive. He spent part of it on the cost of memory rather than on the products. "What we're seeing with memory pricing right now is unprecedented," Ternus told analysts, according to The Register.

The numbers behind the warning are concrete. Apple took $10.8 billion from Macs in the September quarter, up 24 percent year on year. That followed $10.35 billion in the June quarter, up nearly 29 percent. The MacBook Neo and MacBook Pro did most of that work. "We have never sold more Macs in a fiscal year than we did this time," Ternus said. Chief financial officer Kevan Parekh said gross margin fell by roughly one percentage point between the June and September quarters, excluding tariff effects. Memory costs caused the whole drop. Apple expects the figure to fall from 47.9 percent to between 45 and 46 percent in December.

Supply is the constraint, not demand

Chief operating officer Sabih Khan said Apple had already run into supply constraints across iPhone, Mac and iPad in the September quarter. Limited advanced chipmaking capacity largely caused them. Memory is now the bigger problem. "For the December quarter, we expect constraints on Mac and iPad, primarily driven by memory, as demand has been higher than what we expected," Khan said, per The Register.

The company is trying to buy its way out. Ternus said manufacturing purchase obligations rose by $33 billion between June and September. He did not say when the crunch might ease. Parekh said Apple had "reluctantly" raised hardware prices. Those increases came on Macs and iPads in June and on iPhones in September. He said supply constraints made it too early to judge how customers were responding.

The squeeze is not confined to Cupertino. The Decoder reported on Tuesday, citing The Information, that Huawei is telling some customers to source memory for its AI chips themselves. That effectively pushes buyers toward the black market. Smugglers route high-bandwidth memory into China through Hong Kong by bundling it with low-end processors. A Shenzhen broker told The Decoder that smuggled HBM3E now costs around $4,000 per unit, up from a few hundred dollars a year ago. Each AI chip needs six to eight units. Huawei plans to launch the Ascend 960DT early next year. U.S. export rules block direct purchases from Samsung and SK Hynix, which together control over 80 percent of the global HBM market, according to The Decoder. South Korea's customs authority had recorded trade violations worth $560 million by May, already above the previous full-year record. A third of them involved strategic goods such as chips.

Elsewhere, the chips go into cars and factories

The demand side keeps growing. Bosch said today it will move its semiconductor business into a dedicated division from January 2028. It targets about €5bn in annual chip sales by 2030 and will open its fabs to outside customers in robotics, factory automation and AI data centres, The Next Web reported. Bosch holds a 10% stake in ESMC, the TSMC-led joint venture building a plant in Dresden. It is also spending around $2bn converting its Roseville, California site to silicon carbide.

In China, the China Passenger Car Association estimated on Tuesday that passenger new energy vehicle wholesale sales hit a record 1.8 million units in October, up 12 percent year on year, CnEVPost reported. BYD led with 483,125 units, ahead of Geely on 213,165, Chery on 134,471, Changan on 122,422 and Leapmotor on 103,021. Tesla China wholesaled 67,829 vehicles in October, its lowest since February, according to CnEVPost.

The pressure runs both ways. SCMP reported on Monday that as BYD and Geely hit sales highs, smaller Chinese carmakers face a tightening squeeze. For consumer electronics buyers, the near-term read is simpler. Record unit sales and rising prices are happening at the same time, and the memory bill is the reason.