Apple plans price increases on devices as AI-driven memory chip costs surge

Tim Cook delivered a message on June 17 that Apple shareholders probably didn’t want to hear: device prices are going up. The outgoing CEO told the Wall Street Journal that rising memory chip costs have made price increases “unavoidable,” pointing to a supply squeeze driven by the insatiable appetite of AI data centers.

Cook described the surge in demand for memory and storage chips as a “hundred-year flood.”

The AI infrastructure boom is eating everyone’s lunch

The memory chips that go into your iPhone are the same fundamental components that hyperscale tech firms are hoovering up to build AI infrastructure. DRAM and NAND flash, the two types of memory critical to both smartphones and data centers, are caught in a tug-of-war between consumer electronics and the AI buildout.

TechInsights, a semiconductor industry research firm, estimates that if Apple passes the full cost increase through to consumers, the upcoming iPhone Pro model could see its price tag rise by approximately $270.