How Apple executives’ ‘extended hotel stays’ in South Korea may not be working

Apple executives have been camping out in South Korean hotels near Samsung and SK Hynix factories for weeks, desperately trying to lock in favorable memory chip contracts. But according to Citrini analyst Jukan, their extended stay might not be paying off—Wall Street is "way too optimistic about Apple," and memory makers are planning aggressive price hikes starting this month.The iPhone maker has stationed purchasing teams at business hotels in Hwaseong and Pangyo, within striking distance of the world's largest memory manufacturers. They're negotiating two- to three-year supply agreements for LPDDR5X RAM as prices have exploded by up to 300% since mid-2025. A 12GB memory module now costs Apple roughly $70 per unit, up from around $21 earlier last year.

Samsung's own divisions feeling the squeeze; Apple faces worse

The situation reveals just how tight the memory market has become.

Jukan reports that Samsung's semiconductor division recently raised DRAM prices to its own mobile division by 60-70%. "They're pushing such an absurd condition even on MX, which is part of the same family—so just imagine how much they're raising prices for other companies," the analyst noted.If Samsung is charging its sister division that much more, Apple and other external customers likely face even steeper increases.

Both Samsung and SK Hynix are sticking to quarterly contracts rather than long-term agreements, anticipating continued price surges through 2027. Industry sources say they're supplying server DRAM in Q1 2026 at 60-70% higher prices than Q4 2025.

AI boom creates zero-sum game for memory supply

The shortage stems from insatiable AI demand for high-bandwidth memory (HBM). Every chip allocated to Nvidia's H200 AI accelerators—which require eight HBM3E units each—means less capacity for standard mobile and PC RAM.

Chinese customers alone have placed $3 billion in new AI chip orders since receiving US export approval.Apple isn't alone in its Korean hotel marathon. Dell,

Google

, and Amazon executives have also established extended stays near semiconductor plants. But unlike smaller manufacturers, Apple's efficient iOS architecture and premium pricing may help it absorb higher costs without immediately raising iPhone prices. Memory now accounts for over 20% of smartphone production costs, up from 15% just months ago.The real test comes this month when Samsung and SK Hynix renegotiate their Apple contracts.