Apple’s 2026 NAND Costs Are Projected at $25 Billion Amid AI Demand

AI data-center buying has shifted the NAND flash market toward suppliers, with Apple’s projected 2026 bill at $25 billion for a volume that cost $6 billion in 2025.

Microsoft, Amazon, Meta and Google now purchase about twice as much NAND together as Apple does. Roughly two years ago, Apple alone bought close to double those four companies’ combined volume. NAND now costs more than 30 cents per gigabyte, up from about 5 cents in 2023.

Cloud operators can absorb higher flash costs more easily than phone makers because flash makes up a smaller share of data-center construction costs than of an iPhone’s bill of materials. Accounting rules also let cloud companies spread infrastructure expenses across multiple years. The shift adds to a broader focus on AI investment returns and memory suppliers’ renewed strength.

Apple’s projected spending reflects the higher cost of buying a similar amount of NAND. The 256GB iPhone 18 Pro debuted in China on Sept. 9 with a starting price of 9,999 yuan, 1,000 yuan above the previous generation. Apple attributed the higher price to rising memory-chip costs.

Meta, Microsoft and Amazon have signed long-term supply agreements with Kioxia at higher prices. The deals secure supply for the cloud companies and could help protect Kioxia’s profits if market conditions turn.

The cost increase also affects Apple’s storage-upgrade economics. For the iPhone 17 Pro, doubling storage costs customers $200; the additional capacity cost Apple about $15 before, but now costs about $66. Average gross margins on extra storage for iPhones and iPads had exceeded 80%.

Memory demand is forecast to increase 36.2% in 2027, while supply is projected to grow 19.3%. The projected supply-demand gap widens to 13.6% from 8.1% in 2026, with tight conditions potentially continuing into the first half of 2028. Major suppliers’ DRAM and high-bandwidth memory capacity is nearly fully booked, while NAND allocations cover only about 60% to 70% of customer demand.