Apple is stockpiling memory, and the stockpile is now visible in its accounts. Inventory reached 14.54 billion dollars in the fiscal fourth quarter ended September 26, up from 11.09 billion dollars in the June quarter and from 5.72 billion dollars in the same quarter a year earlier, a year over year increase of 154.3 percent.
Chief executive John Ternus told analysts that memory pricing is unprecedented, that September quarter memory costs were higher than in the June quarter, and that Apple expects even higher memory costs in the December quarter, continuing to increase beyond it. The company guided December quarter gross margin to 45 to 46 percent, against 47.9 percent achieved in the September quarter, and attributed the step down largely to memory. Earlier price increases, on Mac and iPad at the end of June and on iPhones in September, offset part of the increase.
The balance sheet commitment is larger than the inventory line alone. Ternus said manufacturing purchase obligations rose by 33 billion dollars from June to September as Apple increased purchases of the component, a figure the company said will appear in its annual filing. Chief operating officer Sabih Khan, who runs supply chain and manufacturing, joined the call to address memory questions and did not rule out further device price increases.
Apple also said supply constraints held back iPad sales in the quarter. iPad revenue was 6.2 billion dollars, below analyst expectations of 6.7 billion dollars and down 10 percent year over year, the only major product segment not to grow. The episode ties the consumer end of the market to the same constraint visible at Samsung, whose record memory quarter was reported here on November 2, and at Raspberry Pi, which raised prices again this week citing 16GB DRAM supply: AI data centre demand is repricing memory for everyone who buys it.