Apple signals possible price hikes as AI-driven chip demand pushes up costs

Apple may increase prices across some of its products as soaring costs for memory and storage components, driven by booming demand from artificial intelligence (AI) infrastructure, continue to squeeze margins, according to comments made by chief executive officer Tim Cook.

In an interview with The Wall Street Journal, Cook said the technology giant has been attempting to shield consumers from rising component costs but warned that absorbing the increases indefinitely is no longer viable.

"We're doing our best to mitigate the huge increases that are being passed to us and have tried to protect our customers from them, but the situation has become unsustainable," Cook said, indicating that price increases may eventually be unavoidable.

The remarks highlight growing concerns across the technology sector about the impact of AI-related demand on global semiconductor supply chains. The rapid expansion of AI data centres has significantly increased demand for advanced memory chips, leading to tighter supplies and higher prices for manufacturers of consumer electronics.

Apple's concerns are centred particularly on memory and storage components, including the dynamic random-access memory (DRAM) market. Industry analysts have noted that chipmakers are increasingly allocating production capacity towards high-bandwidth memory used in AI servers, reducing availability for traditional consumer devices.

Cook said a growing share of global memory production is being diverted to support AI infrastructure, creating supply constraints at a time when demand for consumer technology products remains strong.

According to the report, industry associations representing sectors such as automotive manufacturing, retail and electronics have also warned that tightening memory chip supplies could result in higher prices for consumers and potential disruptions across supply chains.

While acknowledging the challenges, Cook did not indicate when any price increases might be introduced, how significant they could be or which products could be affected.

The comments come as Apple prepares for a leadership transition later this year. In April, the company announced that senior vice-president of Hardware Engineering John Ternus will succeed Cook as chief executive officer from 1 September 2026, following a succession plan approved unanimously by the board.

Cook will move into the newly created position of executive chairman, where he is expected to focus on engagement with global policymakers and provide guidance on selected strategic matters.

For consumers, any increase in Apple product prices would reflect a broader trend emerging across the technology industry, where AI-driven demand for semiconductors is reshaping supply chains and raising input costs for device manufacturers worldwide.

With IANS inputs