Apple $AAPL CEO Tim Cook says the tech giant will raise prices on its products to offset surging memory and storage chip costs, saying price increases are "unavoidable."
"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 told The Wall Street Journal. Details on the timing and magnitude of the price hikes, and which product lines would see higher price tags, remain to be seen.
At the root of the problem is fierce rivalry for memory and storage components fueled by the AI buildout. After hyperscalers like Google $GOOGL, Microsoft $MSFT, Meta $META, and Amazon $AMZN began dramatically expanding their capital expenditure budgets, the cost of both chip types shot up fourfold. Chip manufacturers have redirected a growing share of their output toward the specialized high-bandwidth memory that AI servers require, shrinking the pool available for phones, laptops, and other consumer products.
"There's less supply at a time when consumers want devices and the memory guys are passing along huge price increases," Cook told The Journal. "We definitely need memory pricing and supply to return to reasonable levels for consumer products. That's the bottom line."
Describing the pricing environment as a "hundred-year flood," Cook said the volatility he has witnessed over the past six months is without precedent across a career in electronics supply chain management stretching back more than four decades.
Cook floated the possibility of tapping Apple's substantial financial resources to help bring more memory capacity to market. "We're willing to use our balance sheet to help be a part of the solution," he said. "Obviously, more capacity is needed." On the question of whether Apple might vertically integrate into chip manufacturing, Cook dismissed the idea outright: "We can't do everything. We know what we're good at."
When asked whether national-security restrictions on working with Chinese memory suppliers should be relaxed, Cook said: "Everything needs to be on the table. I think we should look at all supply."
Hewlett-Packard, Dell $DELL, and Nintendo are among the device makers that have already moved to raise prices, according to Reuters. Several trade associations jointly petitioned Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick, urging federal intervention to address the diversion of memory supply toward AI customers.
Hardware engineering chief John Ternus takes over as Apple's top executive on Sept. 1, capping a 15-year tenure for Cook at the helm of the company. Apple's next major product launch is expected in September with the iPhone 18 lineup.