The Wall Street Journal reported on 28 October that Apple “for years bullied flash-storage makers into steep discounts—until AI hyperscalers bid up prices and gobbled up supply”. The story, by Rolfe Winkler, describes Apple as “the world’s biggest buyer of flash”.
Apple’s own quarterly filings track the same squeeze. Its March and June 2026 10-Qs warn of rising costs for “storage (NAND) and memory (DRAM)”, and the June filing says price increases “have been” taken. On the supply side, Samsung’s memory sales rose to KRW 140.7 trillion in the third quarter from KRW 26.7 trillion a year earlier, about 5.3 times by our arithmetic.
Business Pill · Lead Time
An evergreen Business Engineer explainer on lead time, the gap between ordering and receiving supply. It explains the general idea only and does not discuss Apple or memory makers.
The key insight:Apple’s 10-Q for the December 2025 quarter does not mention NAND or memory; by July its filing warns that rising storage and memory costs may hurt gross margin and says price increases have been taken.
According to the Journal’s opening, Apple “used its position to squeeze every cent from suppliers” and “bullied flash makers into opening their books so it could monitor sales, making sure no one else got a better deal”. The article’s anecdote is Scott Nelson, a sales executive who sold flash storage to Apple for Japan-based Kioxia; the Journal says “the tables have turned”.
Left: Samsung memory sales in KRW trillion for 3Q 2025, 2Q 2026 and 3Q 2026, from its own earnings presentation; 5.3x is our arithmetic. Right: Apple products gross margin by quarter from its Forms 10-Q, labelled with what each filing says about NAND and DRAM.
Patently Apple posted an X Article on 29 October 2026, โAI Boom Turns the Tables on Apple as Memory Suppliers Fight Backโ, summarising a Wall Street Journal report. The article cites a TechInsights estimate that Apple will spend approximately $25 billion on flash storage in 2026, compared with $6 billion in 2025, despite purchasing roughly the same volume. We embed it as commentary on this story; the estimates are TechInsightsโ and the Journalโs as relayed by Patently Apple, not our figures.
What Apple’s Filings Say
Apple’s 10-Q for the quarter ended 27 June 2026 says: “The Company is experiencing a period of supply constraints and increasing costs for components driven by factors such as industry supply-demand imbalances for components, including advanced semiconductors, storage (NAND) and memory (DRAM). The Company expects these trends to intensify, which may materially negatively impact the Company’s revenue, costs, gross margin, results of operations and financial condition.”
The same filing adds: “Actions, such as price increases, that have been and may in the future be taken by the Company may not effectively mitigate these negative impacts, and may also reduce demand for the Company’s products”.
The March 2026 10-Q carries the NAND and DRAM language, referring to “actions that may be taken by the Company in response to such trends”. In our text search of the 10-Q for the quarter ended 27 December 2025, the words “NAND” and “memory” do not appear.
The Margin Line
Apple’s products gross margin was 40.7% in the December 2025 quarter, 38.7% in the March 2026 quarter and 40.1% in the June 2026 quarter, against 34.5% a year earlier. The June 10-Q says the increase was “primarily due to a different mix of products and tariff refunds, partially offset by higher costs, including memory”.
The Supplier Side
Samsung’s third-quarter presentation says memory “market price increased across all applications, led by strong demand momentum for servers”. For 2027 it says “surging AI-driven demand likely to further tighten supply shortages compared with CY26”, and it lists building “a stable sales base through long-term contracts”.
SK hynix’s third-quarter release says “the LTA volume secured to date corresponds to more than 50% of total production capacity for 2027 and 2028”, with a mechanism “that reflects market conditions within a price range agreed upon with customers”.
What Comes Next
Apple’s investor relations site lists its fiscal 2026 fourth-quarter results for 2 November 2026 at 2 p.m. Pacific time.
As we read the filings, the change is in Apple’s own wording: the March 10-Q refers to actions that may be taken, while the June 10-Q says price increases have been taken.
As we read the margin line, Apple’s products gross margin stayed near 40% because, in its own words, product mix and tariff refunds more than offset higher costs, including memory.
On the supply side, Samsung’s presentation reports higher memory prices across all applications, and SK hynix describes long-term agreements priced within ranges agreed with customers; neither names Apple.
Apple, Form 10-Q for the quarter ended 27 June 2026
“The Company expects these trends to intensify”
Three Implications
FOR APPLE Its June 10-Q says rising NAND and DRAM costs may materially negatively affect revenue, costs and gross margin.
FOR MEMORY MAKERS Samsung says AI-driven demand is likely to further tighten supply shortages in 2027 compared with 2026.
FOR THE NEXT PRINTApple’s investor relations site lists fiscal fourth-quarter results for 2 November 2026.
The framework argues: “HBM growth is outpacing accelerator demand, making memory the rate-limiting factor in the AI scaling equation.”
Apple’s filings describe rising storage and memory costs driven by industry supply-demand imbalances. The framework does not discuss Apple or flash pricing.
What Is Not Established
The Journal article is behind a paywall; we read its headline, subheading and opening paragraphs only. Figures attributed to the Journal by other sites, which we could not read in the article itself, are not used here. Apple does not disclose what it pays for memory or the terms of its supply contracts, and its filings do not separate memory from other component costs.
This Week In The AI Supercycle
Execution Fault Lines, Concentrated Demand, and Geopolitical Firewalls
This week’s issue: the AI build is not short of demand for its parts. It is short of cheap money, and its end revenue rests on a narrow base of large, often venture-funded buyers.
The Journal reports that flash makers have gained leverage over Apple as AI buyers absorb supply. Apple’s filings moved from no mention of NAND or memory in January to warning in May and July that rising storage and memory costs may hurt its gross margin, and the July filing says price increases have been taken. Samsung’s memory sales grew about 5.3 times in a year, by our arithmetic.
A note on sourcing. The Wall Street Journal is quoted from its headline, subheading and opening paragraphs; Apple’s statements and margins come from its Forms 10-Q; Samsung and SK hynix figures and quotes come from their own third-quarter materials; the 5.3x multiple is our arithmetic.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
