TrendForce estimates that the bill of materials for Apple’s upcoming iPhone 18 Pro will rise by approximately 38 percent year over year, driven almost entirely by a surge in memory prices that has reshaped the cost structure of flagship smartphones.
In a research report published on August 10, the market intelligence firm said memory has overtaken the application processor and display as the dominant cost driver in the 256 GB iPhone Pro. Memory’s share of total BOM cost has climbed from roughly 10 percent a year ago to approximately 34 percent in the third quarter of 2026, and TrendForce projects it will exceed 40 percent in the first half of 2027.
- TrendForce estimates the 256 GB iPhone 18 Pro BOM cost will rise approximately 38% year over year
- Memory has overtaken the application processor and display as the largest BOM cost component
- Memory’s share of iPhone Pro BOM has risen from ~10% a year ago to ~34% in 3Q26
- Apple may sacrifice gross margin to soften retail price increases, following its recent MacBook strategy
- Android vendors face even greater pressure due to thinner margins
- Memory prices have risen five- to sevenfold since early 2025
- Global smartphone production is expected to remain under downward pressure from 2H26 through 2027
The cost surge is the result of a broader memory supply crunch that has intensified throughout 2025 and 2026. Contract prices for DRAM surged 90 to 95 percent quarter over quarter in the first quarter of 2026, according to TrendForce’s earlier estimates, while NAND flash contract prices rose 55 to 60 percent during the same period. Major memory manufacturers including Samsung Electronics, SK Hynix, and Micron have reallocated production capacity toward high-bandwidth memory for AI data centers, constraining the supply of conventional DRAM and NAND flash used in consumer devices.
For Apple, the 38 percent increase in BOM cost for the iPhone 18 Pro 256 GB model would mark one of the steeper year-over-year production cost jumps in recent iPhone generations. The application processor and display have historically been the two largest cost components in an iPhone, with memory typically accounting for a single-digit or low-double-digit percentage of the total. The reversal of that hierarchy reflects how dramatically memory pricing has outpaced every other component category.
TrendForce believes Apple is likely to follow the pricing approach it used for recent MacBook launches, absorbing part of the increase by reducing gross margins rather than passing the full cost to consumers. The firm also suggests Apple could raise prices on older iPhone models still in its lineup to help offset the higher memory costs across the portfolio. Apple’s industry-leading profitability gives it more flexibility than most competitors to absorb cost increases without pushing retail prices to levels that would weaken demand.
The situation is more precarious for Android vendors. TrendForce notes that brands with thinner margins, particularly in the entry-level and mid-range segments, have far less room to absorb the same cost pressure. With memory prices up five- to sevenfold since the beginning of 2025, some vendors may need to raise retail prices sharply or discontinue product lines that have slipped into negative gross margins. Chinese brands focused on the budget segment, including Xiaomi and Transsion, are especially exposed.
Earlier TrendForce research from February 2026 forecast global smartphone production to decline 10 percent year over year to approximately 1.135 billion units, with a bear-case scenario warning of a 15 percent or greater contraction if memory prices remain elevated. The firm has since maintained that global smartphone production will remain under downward pressure from the second half of 2026 through 2027.
IDC has separately characterized the shortage as structural rather than cyclical, noting that the reallocation of manufacturing capacity toward AI-grade memory has created a zero-sum dynamic in which every wafer directed to an HBM stack for data center GPUs is a wafer unavailable for smartphone memory modules. TrendForce expects the supply tightness to persist until at least the second half of 2027.
Apple has not announced pricing or specifications for the iPhone 18 Pro. The device is expected to debut at the company’s fall event, typically held in September.