Apple Reportedly Signs NAND LTA Agreement, Kioxia May Be Candidate

Apple will hold a new product launch event later this week, putting its memory procurement strategy back in the market spotlight. If the agreement is ultimately finalized, Apple may use it to lock in a portion of its NAND supply and reduce the impact of memory chip price volatility and supply tightness on product costs. TradingKey - According to industry sources cited by South Korean media outlet Economy Tribune, Apple ( AAPL ) will soon sign a long-term agreement (LTA) for NAND flash memory, though the counterparty, procurement volume, and pricing terms have not yet been disclosed. Citi noted in a report that market speculation broadly points to Kioxia as the partner for this Apple NAND LTA, although neither Apple nor Kioxia has officially confirmed any such arrangement. Therefore, the underlying logic behind Apple signing a NAND LTA is to lock in a portion of storage capacity through medium- to long-term contracts, thereby mitigating supply risks during new product cycles. However, long-term agreements do not equate to lower chip prices; the final outcome still depends on procurement volumes, pricing mechanisms, delivery arrangements, and shifts in market supply and demand. The memory supply chain is currently being shaped by two types of demand shifts. On one hand, the buildout of AI data centers is driving demand for HBM, server DRAM, and enterprise SSDs; on the other hand, memory manufacturers may allocate more capacity and resources to products with higher profit margins and stronger order visibility. Consumer electronics makers that continue to rely on spot purchases or short-term procurement may face uncertainties regarding supply priority and cost fluctuations. NAND flash memory is a critical storage component for iPhones, iPads, Macs, and other consumer electronics devices. For Apple, the main value of long-term agreements typically extends beyond merely obtaining chips to locking in supply in advance, improving procurement visibility, and strengthening bargaining power and supply assurance during demand peaks or industry capacity reallocations. Kioxia is one of the main suppliers in the NAND flash memory industry and a memory chip manufacturer in Apple's supply chain that has long drawn market attention. A Citi report noted that Kioxia could be a counterparty to this agreement, leading the market to speculate that Apple might further expand its long-term NAND collaboration with Kioxia. Market speculation currently suggests that Apple's contract runs for three to five years with no price cap, though duration and pricing details have not been officially confirmed. If true, Kioxia would join SK Hynix as one of the few major memory manufacturers utilizing a "no-price-cap" LTA structure. Taiwanese media outlet DIGITIMES previously reported that Apple had agreed to roughly double the NAND prices it pays Kioxia starting in the first quarter of this year and shift to quarterly price adjustments. Notably, amid rising memory prices, Apple also attempted to introduce additional suppliers. Reports indicate that Apple tested Chinese chipmaker ChangXin Memory Technologies' (CXMT) LPDDR5X products and evaluated supply feasibility; however, price negotiations ultimately broke down because CXMT's quotes were comparable to, or even higher than, those of Samsung Electronics and SK Hynix. Meanwhile, the U.S. government's negative stance on Apple using Chinese memory chips has also limited its scope to expand supply sources. However, CXMT's failure to enter the stable supply chain does not mean Apple will stop evaluating new memory suppliers. On the contrary, amid shifting demand across NAND, mobile DRAM, and high-end products, Apple may still use various supplier combinations to reduce reliance on any single source.