Apple’s (AAPL) recent first-quarter earnings call provided some insight on the memory sector, according to TF International Securities analyst Ming-Chi Kuo.
“Apple highlighted two major uncertainties in its hardware supply chain: advanced nodes and memory,” Kuo said in a post on X. “The former is defined as a ‘supply constraint,’ while the latter is viewed as a ‘cost pressure.'”
“For AI memory investors, Apple’s comments are relatively less relevant,” Kuo added. “In contrast, non-AI memory investors should pay closer attention, as over the long term, the non-AI memory market is likely to reach supply-demand balance more efficiently than the AI memory market.”
The primary producers of AI memory chips include Micron Technology (MU), Samsung (SSNLF) and SK hynix (HXSC.F).
“Had Apple defined memory as a ‘supply constraint’ rather than a ‘cost pressure’ during last week’s call, it likely would have benefited non-AI memory stocks—an outcome some short-term/bullish investors were looking for,” he noted. “Coincidentally, non-AI memory stocks across various markets saw a correction following the earnings call. Yet, few recent discussions have interpreted this pullback through the lens of Apple’s guidance/implications for demand.”
Kuo noted that Apple’s iPhone consumes nearly 25% of the global DRAM and NAND flash smartphone memory market, giving it better bargaining power than most companies. Instead, guidance provided by Qualcomm (QCOM) and MediaTek (MDTK.F) might provide more clarity on the medium- to long-term demand trends for the non-AI/smartphone memory market.
“For 2026, under the pressure of increasing memory and BOM cost, we expect overall smartphone end demand to be negatively impacted,” said MediaTek CEO Lih Shyng Tsai during the company’s fourth-quarter earnings call on Wednesday. “We will work closely with our customers to strategically adjust the product portfolio in order to mitigate the impact. For the first quarter of 2026, we expect mobile phone revenue to decline significantly quarter-over-quarter.”
Qualcomm is on deck to present its first-quarter financial results and guidance after the markets close today.