Apple boosts purchase commitments by $33B amid memory crunch

The iPhone maker mitigated some of the higher memory costs in Q4 with price increases and carry-in inventory from the previous quarter.

Apple executives did not provide further details on the increased purchase obligations and whether they reflected a change in the company's supplier relationships. However, Apple is likely signing long-term agreements to avoid suffering memory shortages during manufacturing, Phil Solis, a research director for IDC, said in an email to Supply Chain Dive. Shorter-term contracts were signed previously when supply was plentiful.

"Every company buying memory has had to change how they buy memory if they want stable pricing and to guarantee supply," Solis said. "Memory scarcity has given memory suppliers the upper hand for now."

Heavy investment in artificial intelligence applications and the data centers that run them has driven up memory prices by as much as 400% in the last two years, placing immense pressure on consumer electronics companies.

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