Apple Price Rises Incoming as AI Boom Drives Up Memory Chip Costs
Apple anticipates increasing the prices of its products, a move confirmed by outgoing chief executive Tim Cook, who described the surge in memory chip costs as "unsustainable." Cook informed the Wall Street Journal that these price adjustments are "unavoidable," though specific products or the timeline for these changes, including potential impacts on the forthcoming iPhone 18, remain undisclosed.
The artificial intelligence (AI) boom has significantly inflated the cost of memory chips, critical components for smartphones and other smart devices. In parallel, US President Donald Trump stated that Apple has committed to working with Intel to manufacture chips domestically, a decision he linked to national production needs. This announcement contributed to Intel's shares rising over 10% on Thursday.
Cook elaborated on the pressures facing Apple, noting, "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 highlighted a scarcity of supply coinciding with heightened consumer demand, exacerbated by substantial price hikes from memory chip suppliers.
Ram, typically an inexpensive computer component, has more than doubled in price since October 2025. Beyond AI demand, disruptions to the global helium supply—a gas essential for semiconductor manufacturing, linked to conflict in Iran—are also contributing to rising chip costs. Industry analysis firm Omdia forecasts a global average smartphone price increase of around 20% in 2026, setting a new record. Apple's new iPhones could see price increases of up to $150 due to enhanced AI capabilities, according to Omdia's Chiew Le Xuan.
Other major technology firms have also signalled challenges. Taiwan Semiconductor Manufacturing Company (TSMC), a leading chip producer for Apple, Nvidia, and AMD, has not ruled out price increases. Samsung has projected memory chip shortages will elevate electronic device costs. Earlier in the year, Sony raised its PlayStation 5 console prices by £90 in the UK and $100 in the US, citing "global economic landscape pressures," with Nintendo following suit for its Switch 2 console.
