Apple Plans Price Hikes as AI Companies Drive Up Chip Costs

Apple plans to raise prices due to a surge in the costs of memory and storage chips, CEO Tim Cook told The Wall Street Journal (WSJ) in a report posted Wednesday (June 17).

Cook declined to say when the planned price increases would take effect, how large they would be, or which products they would include, according to the report.

“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,” Cook said, per the report.

The prices for memory and storage chips have quadrupled over the past year, driven by artificial intelligence companies’ demand for the products, according to the report.

In response to the rising costs, other smartphone makers have raised prices, as have companies that make PCs, game consoles and other devices that use the chips, the report said.

While Apple is one of the world’s largest buyers of chips and has long used its market power to command lower prices from suppliers, the company now must “wait in line” behind AI companies, per the report.

Cook told WSJ that he has never seen a surge in commodity prices like he’s seen over the past six months.

“This is a hundred-year flood,” Cook said. “I’ve never seen anything like it in any area in over 40 years.”

It was reported in March that the AI industry is causing a shortage of memory chips needed by the smartphone industry even as AI features become part of the latest mobile devices.

The demand for memory chips from AI data center operators has left device makers facing higher prices and a shortage of chips that could slash smartphone sales by 13% this year, according to the report.

It was reported in January that the global AI boom was beginning to alter the economics of smartphones and other consumer electronics by causing memory components to be diverted toward large-scale AI systems under long-term supply agreements.

In a June 16 press release about global smartphone sales, Counterpoint Research said supply chain stability has been an increasingly important factor in the industry.

Research Director Tarun Pathak said in the release: “It is now clear that memory prices will remain high for the rest of 2026, and OEMs have adjusted the playbook. To navigate these pressures, they are now implementing a mix of price increases, product launch realignments and aggressive cost-optimization tactics, including devices ‘cutting corners on different features’ and more efficient channel management.”