Apple Accepts 100% NAND Price Hike

Recently, amid tightening memory supply and aggressive price hikes, Apple is reportedly being forced to reset its NAND procurement strategy.

According to industry sources in Japan, Apple has agreed to double its NAND Flash purchase price from Kioxia starting in Q1 (January–March), with future pricing to be adjusted quarterly in line with market conditions. The move underscores how sharply the NAND market has turned amid AI-driven demand growth.

AI workloads continue to fuel explosive data storage requirements. Market research firm TrendForce recently raised its Q1 general-purpose NAND contract price forecast from a 33%–38% QoQ increase to a much steeper 55%–60% surge. The supply-demand imbalance is clearly accelerating.

Major memory makers are already seeing dramatic earnings expansion. For example, SanDisk reported that for its fiscal Q2 ended January 2, 2026, GAAP net profit jumped 672% year over year — reflecting the powerful pricing recovery cycle underway.

However, Kioxia has not benefited proportionally from the memory upcycle since the second half of 2025.

In fiscal Q2 2025 (ended September 30, 2025), Kioxia posted revenue of JPY 448.3 billion, down 6.8% year over year but up 30.8% sequentially. Bit shipments rose nearly 40% QoQ, yet dollar-denominated ASP declined slightly. Operating profit reached JPY 87 billion, below market expectations of JPY 96–100+ billion. Weak guidance further pressured sentiment, triggering a sharp share price drop of over 23% on November 14.

By fiscal Q3 2025 (ended March 2026), performance improved. Revenue climbed to JPY 543.6 billion, up 20.8% YoY and 21.3% QoQ. Non-GAAP operating profit reached JPY 144.7 billion with a 26.6% margin, slightly above guidance. Growth was driven by a roughly 5% sequential increase in bit shipments and more than 10% ASP expansion in U.S. dollar terms.

Even so, Kioxia's rebound still lagged behind peers.

Industry analysts widely attribute the underperformance to Kioxia’s long-term fixed-price supply agreement with Apple, which locked in NAND shipments at levels far below prevailing spot and contract prices during the memory recovery phase.

A prior Morgan Stanley report noted that Apple had secured relatively favorable NAND pricing through its long-term agreement with Kioxia through Q1 2026. However, with that contract expiring, Kioxia was expected to push for substantial price revisions in new negotiations.

At the same time, Apple is reportedly still negotiating DRAM supply, which could result in continued cost pressure and potentially higher pricing for next-generation iPhones.

Given this backdrop, the latest reports that Apple has agreed to a 100% NAND contract price increase — along with a shift toward quarterly repricing — appear credible.

Kioxia's guidance for fiscal Q4 2025 (Q1 2026) further reinforces this view. The company forecasts revenue around JPY 890 billion, implying a sequential increase of approximately 64%, a sharp acceleration compared with Q3.