‘Price increases are unavoidable’: Apple CEO Tim Cook warns of product price hikes as chip costs surge

Apple is preparing to raise prices on its devices as soaring memory and storage chip costs, driven by surging artificial intelligence (AI) demand, tighten pressure across the global electronics supply chain, CEO Tim Cook said.

In an interview with The Wall Street Journal, Cook acknowledged that rising input costs have left the company with limited room to absorb further increases, signalling that consumers will likely bear part of the burden.

“Price increases are unavoidable,” Cook said. “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.”

The remarks mark one of Apple’s clearest warnings yet that the ongoing AI-led boom in data infrastructure is reshaping costs across consumer electronics, particularly in memory chips such as DRAM and storage components.

More from Business

AI demand squeezes chip supply chain

A surge in global AI investment has sharply increased demand for high-bandwidth memory used in data centres and AI servers, leaving less supply available for consumer devices.

Industry participants say this imbalance has pushed up chip prices across the board, forcing electronics makers, including smartphone and PC manufacturers, to reassess pricing strategies.

Apple, which relies heavily on memory and storage components for its iPhones, iPads and Mac computers, is particularly exposed to fluctuations in the DRAM market.

Cook said supply constraints are being exacerbated by chipmakers prioritising higher-margin AI server demand over consumer electronics requirements.

“There’s less supply at a time when consumers want devices and the memory guys are passing along huge price increases,” he noted.

Pressure on consumer electronics makers

The warning from Apple comes amid broader concerns flagged by automakers, retailers and electronics firms, who have cautioned that sustained memory chip inflation could ripple through global supply chains and push up prices for end consumers.

Earlier this month, industry groups had warned that persistent shortages in memory chips could lead to “dramatic price hikes” in US consumer goods and disrupt manufacturing schedules.

Cook said Apple continues to push suppliers to stabilise pricing, but conceded that market dynamics remain challenging.

“We definitely need memory pricing and supply to return to reasonable levels for consumer products. That’s the bottom line,” he said.

Apple considers financial buffer

Cook added that Apple is prepared to deploy its strong balance sheet to help secure supply stability, though he did not provide details on any specific investments.

“We’re willing to use our balance sheet to help be a part of the solution,” he said.

However, he ruled out the possibility of Apple entering direct manufacturing of memory or storage chips, despite growing vertical integration trends in the tech industry.

The development underscores how the AI boom is increasingly reshaping global hardware economics, with demand for advanced chips spilling over into traditional consumer electronics supply chains.

Apple’s warning also comes at a time when the company is preparing its next product cycle, including anticipated launches in its iPhone lineup and possible new form factors.

Cook, who is expected to hand over leadership to hardware chief John Ternus in September, did not specify which products or markets would be affected by potential price adjustments, or the scale of the increases.