Key facts
- Apple CEO Tim Cook warned that price increases for some products are unavoidable.
- Soaring memory chip costs, driven by AI demand, are making it difficult for Apple to absorb expenses.
- Memory chip prices have increased more than sixfold in the past year.
- Apple has not disclosed which products will be affected or the extent of potential price hikes.
- Apple will collaborate with Intel to design and make chips in the U.S.
Apple CEO Tim Cook has indicated that price increases on some of the company's products are unavoidable due to the escalating costs of memory chips, largely driven by the surge in demand for artificial intelligence infrastructure. In an interview with The Wall Street Journal, Cook stated that the company has been attempting to shield consumers from these rising expenses but that the situation has become unsustainable.
Memory components are critical for both AI systems and consumer electronics. According to Morgan Stanley, memory chip prices have increased more than sixfold in the past year as manufacturers struggle to meet demand. If technology companies were to pass these costs entirely to consumers, average selling prices could rise significantly across various product categories, including smartphones, personal computers, servers, and storage products.
While Apple has not specified which products will be affected or the magnitude of the price hikes, potential increases could impact flagship devices like iPhones, Macs, and iPads. Research firm TechInsights estimates that memory and storage components for the iPhone 18 Pro could cost Apple approximately $196, a substantial jump from the estimated $52 for the iPhone 17 Pro. Apple is expected to launch its new iPhone range in September.
President Trump announced that Apple would collaborate with semiconductor manufacturer Intel to design and make chips in the U.S., aiming to bolster domestic semiconductor production.