Intel faces memory-price crunch. Why Apple will be the next victim.

Intel CFO David Zinsner told Barron’s that memory prices could be a challenge in the second half of the year following the company’s earnings, although it had secured supply for the first two quarters of the year.

Demand for memory components in artificial-intelligence hardware will send costs of the parts surging 40%-50% in the current quarter, after a similar gain in the final quarter of 2025, according to Counterpoint Research.

“Intel did note that higher component costs, particularly related to increased memory prices, and wafer substrate supply constraints, were likely to negatively impact unit volumes, and Intel’s revenue potential, to some unknown degree," Benchmark analyst Cody Acree wrote in a research note.

Acree has a Buy rating and $57 target price on Intel stock. Intel shares were down 13% in premarket trading at $47.10 amid disappointment about the earnings report and a lack of customer announcements for its chip-manufacturing operations.

While memory and storage companies such as Micron Technology, Sandisk, Seagate Technology and Western Digital are enjoying a boom from AI-related demand, it isn’t so good for makers of personal computers and mobile phones.

Memory-chip companies have shifted production toward the components used in AI data centers instead of expanding conventional DRAM and NAND used in smartphones, PCs, and other consumer electronics.

That could be worrying for Apple. Memory can make up around 10%-15% of the total bill of materials for a high-end smartphone such as an iPhone according to the research firm IDC.

“Despite [Apple’s] supply agreements that likely mitigate the impact of rising memory costs in the March quarter guide, risk does increase in the June and Sept quarters as production of the next gen of iPhones ramp, impacting cost and margins," wrote UBS analyst David Vogt in a research note this week.

The memory-chip crunch could mean a hit of between 50 and 100 basis points to UBS’s forecast for Apple’s gross margin, which stands at 48.0% in June and 47.8% in September. Vogt has a Neutral rating on Apple stock with a $280 target price.

Apple shares were down 0.1% at $248.19 in premarket trading.

Write to Adam Clark at adam.clark@barrons.com