Apple is preparing to raise prices on some products because of an unusual jump in memory and storage chip costs, CEO Tim Cook said in an exclusive interview with The Wall Street Journal. He said the spike, driven largely by massive demand from the artificial intelligence industry, has made it impossible for the company to keep absorbing the higher input costs. "Unfortunately, price increases are inevitable," Cook said. "We have done everything we could to soften the costs passed on to us and tried to protect customers from the increases, but the situation has become unsustainable." He did not say when the increases would take effect, how large they would be, or which products would be affected.
The backdrop is a deepening memory-chip shortage. Since major tech firms including Google, Microsoft, Meta and Amazon sharply expanded AI infrastructure spending, demand for memory and storage chips has surged to unprecedented levels. The report says DRAM and NAND prices have quadrupled since last year, and the trend is expected to continue through 2027.
Memory chips are essential in smartphones, computers, game consoles, medical equipment and cars, but AI servers now consume huge quantities of advanced memory used to train and run large models. As chipmakers redirect more production capacity toward AI, consumer electronics companies are facing higher prices and tighter supply. Cook said one major problem is that more production lines are being assigned to advanced memory for AI servers, reducing the supply available for consumer devices. "There is less supply exactly when consumers want new devices, and memory makers are passing on enormous price increases," he said. "We need memory prices and supply to return to reasonable levels for consumer products."
The timing is sensitive for Apple because it recently announced a major expansion of its AI features and a new version of Siri, which could further increase memory use in its devices. It is also nearing the launch of the next iPhone generation, and industry analysts say component costs could affect future pricing. TechInsights estimates that maintaining current margins could force about a $270 increase in a future iPhone Pro model.
Apple is not alone. Over the past year, HP, Dell and Nintendo have also announced price increases or signaled they may pass some of the higher costs on to consumers. Meanwhile, major memory makers are benefiting from the boom, with profits and market values rising sharply. Cook said Apple is exploring ways to help expand chip supply and is willing to use its financial strength to support production growth, but it does not plan to build memory fabs itself. "We can't do everything," he said. "We know what we're good at." He called the situation unprecedented, saying that in more than four decades in electronics supply chains he had never seen price swings like this. "It's a once-in-a-century event," he said. "I've never seen anything like it."
