US-based tech giant Apple is contemplating increasing prices on some of its products as soaring memory and storage chip expenses, driven by heightened demand from artificial intelligence (AI) data centers, continue to impact the company’s profit margins. Apple CEO Tim Cook, speaking to The Wall Street Journal, acknowledged the challenge of absorbing the significant rise in component costs and hinted at the possibility of shifting some of this financial burden to consumers. Cook stated, “Unfortunately, price increases are unavoidable,” expressing efforts to shield customers from the cost hikes but highlighting the current unsustainable situation.
The surge in AI-driven demand is raising concerns about its effects on global semiconductor supply chains. Various industry groups, including automakers, retailers, and electronics manufacturers, have cautioned about potential consequences such as elevated consumer prices and supply disruptions due to the escalating demand for memory chips. Despite these warnings, Cook did not provide specific details on the timing, extent, or product lines that could be impacted by the anticipated price adjustments.
Apple is particularly concerned about memory and storage components, with a focus on the dynamic random-access memory (DRAM) market. The supply of DRAM chips has tightened as chipmakers allocate more production capacity to high-bandwidth memory essential for AI servers, diverting resources away from consumer electronics. Cook emphasized the challenge of balancing consumer demand for devices with the limited memory supply, leading to significant price hikes being passed on by memory suppliers.
Cook stressed the necessity for memory pricing and supply to stabilize at reasonable levels to support the production of consumer products. In a related development, Apple announced earlier in April that John Ternus, the Senior Vice President of Hardware Engineering, would succeed Tim Cook as Chief Executive Officer effective September 1, 2026. Cook will transition to the role of Executive Chairman, focusing on engaging with global policymakers and assisting with specific company matters.
