Apple Cites Unsustainable Chip Costs for Upcoming Price Adjustments
Apple's outgoing chief executive, Tim Cook, has indicated that the technology giant will need to raise the prices of its products. This decision stems from a significant surge in the cost of memory chips, which are crucial components in devices like smartphones and computers. Cook conveyed to The Wall Street Journal that such price adjustments are “unavoidable” as the current situation regarding memory chip expenses has become “unsustainable.”
While the exact timing of these price increases and the specific products that will be affected remain undisclosed, the announcement suggests a broad impact. It is also unclear whether the anticipated iPhone 18, expected to debut in September, will be subject to these new pricing structures.
AI Demand and Supply Constraints Drive Up Chip Prices
The primary factor behind the escalating chip costs is the burgeoning artificial intelligence (AI) industry, which has significantly increased demand for memory chips in recent months. Cook explained, “We’re doing our best to mitigate the huge increases that are being passed to us, and we’ve been trying to shield our customers from the increases, but the situation has become unsustainable.” He further noted a scarcity of supply coinciding with strong consumer demand for devices, leading chip manufacturers to impose substantial price hikes.
Cook, who will be succeeded by John Ternus as Apple's CEO in September after a 15-year tenure, emphasized the need for memory pricing and supply to stabilize at reasonable levels for consumer products. The price of RAM, traditionally one of the more affordable computer components, has reportedly more than doubled since October 2025.
Broader Industry Pressure and Supply Chain Challenges
“There’s less supply at a time when consumers want devices and the memory guys are passing along huge price increases,” Cook stated. “We definitely need memory pricing and supply to return to reasonable levels for consumer products. That’s the bottom line.”
Apple's announcement aligns with similar concerns voiced by other major technology firms. Taiwan Semiconductor Manufacturing Company (TSMC), a key producer of advanced chips for companies including Apple, Nvidia, and AMD, has also hinted at potential price increases due to rising operational costs. Earlier this year, Samsung projected that shortages in memory chip supply would contribute to higher prices for electronic devices.
Beyond the surge in AI-driven demand, the conflict in Iran has also impacted the global supply of helium, a gas vital for semiconductor manufacturing, further contributing to the increased cost of computer chips. Despite these challenges, Apple has experienced robust sales, with device sales growing by 17% in the first three months of 2026 compared to the previous year, partly driven by strong demand in China. The company previously raised the price of its Mac Mini compact computers by approximately $200 (£150) earlier this year.
Source: Apple to raise prices as AI boom pushes up chip costs