Apple may hike prices as it grapples with memory chip shortage: Report

CALIFORNIA: Apple is likely to raise prices of its products as it confronts rising memory and storage chip costs, its outgoing chief Tim Cook told Wall Street Journal in an interview.

The Apple boss described the situation as “unsustainable” saying that the iPhone maker has done everything to shield customers and that the company has done its best to mitigate the huge price increases that have been passed on to it. Cook declined to detail the products that could see a price hike, the WSJ report added.

The recent artificial intelligence (AI) boom has seen the demand for memory chips skyrocket. The spurt in deploying enterprise AI solutions and agentic AI has led to a huge demand for frontier models. These models are trained in massive data centres that have at their very core AI servers comprising GPUs, CPUs, memory chips and storage chips.

Apple CEO Tim Cook says Apple will increase prices because memory and storage chips are becoming more expensive and harder to obtain.

High demand for AI technology has created a shortage of these chips. Apple says it has tried to avoid raising prices but can no longer absorb the… pic.twitter.com/OZezGM6UBk

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Companies like Korea’s SK Hynix and Samsung and America’s Micron that make memory and storage chips have seen their shares zoom to record levels taking their valuation past a trillion-dollars.

Apple is expected to next launch its iPhone 18 in September that may include a foldable phone. The huge demand for memory chips by AI companies has seen companies like Apple which need these memory chips to run smartphones, iPads struggle to secure their supplies.

AI hyperscalers like Amazon’s AWS and Alphabet have seen massive capital spending as they ramp up compute infrastructure to train massive AI models. Exploding demand from AI companies has been a big challenge for consumer electronics companies like Apple as they have to wait in line to secure supplies.

Globally, companies are making rapid developments in the field of advanced memory chips. South Korea’s SK Hynix sent a sample of its latest high bandwidth memory chips to customers. The next-generation 12-layer HBM4E chip can go up to speeds of 16 gigabits per second per pin and offers over 20% better power efficiency than previous models, a Reuters report quoted the company as saying. (ANI)