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Over the past year, demand by AI hyperscalers has quintupled prices for flash, according to research firm TechInsights.
What Changed
- Demand by AI hyperscalers has quintupled prices for flash over the past year, according to TechInsights.
- Two years ago Apple bought nearly twice the flash of Microsoft, Amazon, Meta and Google combined, according to TechInsights estimates.
- Meta, Microsoft and Amazon signed long-term supply contracts with Kioxia this year at higher prices, which protect Kioxia's profits if the market turns.
AI-generated summary, reviewed by an editor. More on our AI guidelines.
Results day
Kioxia had scheduled its second-quarter results for Oct. 30, 2026, at 18:45 Japan time. Its investor relations page lists consolidated financial results for the six months ended Sept. 30, 2026, under IFRS. Another filing sets out a shareholder return policy with interim dividends and first dividends.
This report draws on that page, which lists the filings by title only. The profit, revenue and dividend figures inside them are not covered here.
A market already selling
Intel stock was down more than 27% in premarket trading on Friday after the chipmaker forecast fourth-quarter revenue of $15.0 billion to $16.0 billion. Alphabet had its worst day on record on Thursday, wiping out about $500 billion in market value. Chip stocks had already fallen for six straight sessions by mid-October.
Markets abroad fell too. South Korea's Kospi closed 3.5% lower, and Japan's Nikkei 225 dropped 2.1%.
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The customer that lost its grip
Apple was the world's biggest buyer of flash, the chips in iPhones that store photos, music and apps.
Two years ago, Apple bought nearly twice the flash storage of Microsoft, Amazon, Meta and Google combined, according to TechInsights estimates.
Flash that cost $68 a gigabyte in 2005 had fallen to a nickel by 2023. Demand by the AI industry has since lifted the price to more than 30 cents a gigabyte, a 550% jump. TechInsights estimates Apple will spend $25 billion on flash storage this year for about the same amount it bought for $6 billion in 2025. Tim Cook, Apple's executive chairman, compared escalating memory chip prices to a "100-year flood."
"Apple has historically driven a very hard bargain with memory suppliers," said Walt Coon, an analyst at TechInsights. "And there's no shortage of satisfaction among suppliers now that the balance of power is shifting."
Apple said in a statement that it has worked with many of its suppliers for decades and values their partnership.
Contracts built for a downturn
Meta, Microsoft and Amazon signed contracts with Kioxia this year to secure long-term supply by committing to higher prices. Those contracts protect Kioxia's profits if the market turns.
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Flash storage is a smaller part of building a data center than of making an iPhone, and accounting rules let companies spread the cost over years.
The work-from-home device boom cooled, and flash prices bottomed out at 5 cents a gigabyte. Bernstein Research estimated the flash industry generated operating losses of $19 billion that year, while Apple earned $14 billion in gross profit selling extra flash storage.
"It's been a love-hate relationship between Apple and the flash industry," said Mark Newman, an analyst with Bernstein Research. Apple sustained the manufacturers for years, he said, but its power to cap prices left suppliers feeling "screwed."
Scott Nelson, a Kioxia sales executive who sold flash to Apple, called those years tough times that "I hope we don't ever see again."
The question for Apple is whether consumers keep their iPhones longer at the higher prices or keep buying at their usual pace. For the flash makers, the question is when, or if, Apple will regain its leverage.
Frequently Asked Questions
How much have flash prices risen?
Demand by AI hyperscalers has quintupled flash prices over the past year, according to TechInsights. Flash that cost a nickel a gigabyte in 2023 now costs more than 30 cents, a 550% jump.
Why does flash weigh less on data center builders than on Apple?
Flash storage is a smaller part of building a data center than of making an iPhone, and accounting rules let companies spread the cost over years.
How much more will Apple pay for flash?
TechInsights estimates Apple will spend $25 billion on flash storage this year for about the same amount it bought for $6 billion in 2025.
AI-generated summary, reviewed by an editor. More on our AI guidelines.
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Marcus Schuler
Editor-in-Chief and founder of Implicator.ai. Former ARD correspondent and senior broadcast journalist with 10+ years covering tech. Writes daily briefings on policy and market developments. Based in San Francisco. E-mail: editor@implicator.ai
