Apple says price hikes are unavoidable as AI chip costs soar

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Apple is preparing to raise prices across parts of its product lineup as soaring memory and storage chip costs continue to put pressure on the company’s supply chain, CEO Tim Cook said in an interview with The Wall Street Journal.

“Unfortunately, price increases are unavoidable,” Cook said, adding that Apple has tried to absorb higher component costs but can no longer shield customers from the impact.

Cook did not specify when the increases would take effect or which products would be affected. However, Apple’s next major hardware launch is expected in September with the iPhone 18 lineup and the company’s first foldable iPhone.

AI demand is driving up chip prices

The biggest challenge comes from DRAM and NAND storage chips, which are used in smartphones, laptops, gaming consoles, and many other consumer devices.

As companies such as Google, Microsoft, Meta, and Amazon continue investing heavily in AI infrastructure, demand for these components has surged. According to TechInsights, average prices for both DRAM and NAND have quadrupled since last year and are expected to continue rising through 2027.

Research firm TechInsights estimates that maintaining Apple’s current profit margins could add roughly $270 to the price of a future iPhone Pro model.

Cook highlighted DRAM as a particular concern, noting that more supply is being allocated to high-bandwidth memory used in AI servers, while consumer electronics manufacturers compete for a shrinking pool of available chips.

Apple is exploring ways to increase supply

Cook said Apple is willing to use its financial resources to help expand memory production, although he did not provide details about what those investments might involve.

At the same time, he ruled out building Apple’s own memory or storage fabrication facilities, saying the company prefers to focus on areas where it has the deepest expertise.

The rollout of Apple Intelligence adds another layer to the challenge. Features such as the redesigned Siri require additional DRAM, placing Apple in direct competition for the same memory chips that are contributing to the current supply shortage.

Several technology companies, including HP, Dell, and Nintendo, have already raised prices in response to higher component costs. Morgan Stanley also expects smartphone and PC prices in the United States to increase by approximately 15% this year.

Cook described the current market conditions as unlike anything he has experienced during more than four decades in the electronics industry, calling the rapid rise in memory prices “a hundred-year flood.”

If memory and storage costs continue to climb, consumers could see higher prices across a wide range of Apple products in the coming years.

Would higher prices change your plans to buy an iPhone, Mac, or iPad? Let us know in the comments below.

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