Tech giants, including Apple, are reportedly camping out in South Korean hotels to secure crucial memory chip supplies. A global shortage, driven by AI demand, has sent RAM prices soaring, forcing companies to negotiate long-term contracts. This situation could lead to higher iPhone prices or reduced memory in future models.

Apple has stationed executives in South Korean hotels near Samsung and SK Hynix factories. The iPhone maker is desperately trying to secure long-term memory chip supplies amid a worsening global shortage. RAM prices have skyrocketed by as much as 300% since mid-2025, forcing tech giants to take extraordinary measures.According to The Korea Economic Daily, Apple’s purchasing teams have taken up semi-permanent residence at hotels in Hwaseong, Gyeonggi Province. They’re positioned within striking distance of Samsung and SK Hynix’s semiconductor plants. The goal is to negotiate two- to three-year contracts for LPDDR5X RAM needed in upcoming iPhone models. A 12GB memory module now costs Apple approximately $70 per unit. That’s a staggering 230% increase from early 2025 prices.

Tech Giants camp out as memory suppliers hold all the cards

Apple isn’t alone in its Korean hotel marathon. Dell, Google, and Amazon executives have also established extended stays in the region. Local media describes this as a “semiconductor boom” for South Korea’s hospitality industry. Business hotels like the Doubletree and Nine Tree in Pangyo have seen surging demand for long-term accommodations.The memory manufacturers aren’t budging on long-term agreements. Samsung and SK Hynix are sticking to quarterly contracts. They anticipate continued price increases through 2027. Both, according to The Korea Economic Daily, are supplying server DRAM in Q1 2026 at a respective 60-70% rise over Q4 2025 supplies.

AI demand creates perfect storm for memory shortage

The crisis is a result of the unabated demand by AI companies for HBM3E-a stacked memory built by stacking DRAM chips. This type of memory is manufactured by stacking DRAM chips. Nvidia’s H200 AI accelerator requires eight HBM3E units each. Chinese customers alone have placed approximately $3 billion in new orders since receiving US export approval. This production priority has created severe shortages of standard server and mobile DRAM.According to industry analyst Jukan, memory now makes up more than 20% of smartphone production costs, up from around 15% a few quarters ago. One potential consequence of the shortage is that it could force Apple to raise the price of its iPhones or ship models with less RAM. The company’s efficient iOS architecture and higher profit margins, however, may make it better placed to weather the disruption than its competitors.