Apple likely to increase prices as AI boom drives up chip costs

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US-based tech giant Apple is likely to raise prices across some of its products as surging memory and storage chip costs are due to an increase in demand from artificial intelligence (AI) data centres. The increased demand has put continued pressure on the company's margins, according to a report.

According to IANS, speaking to the media on Thursday, Apple CEO Tim Cook said that the company can no longer fully absorb the sharp increase in component costs and may eventually pass some of the burden on to consumers.

He asserted, "Unfortunately, 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 added.

Concerns over semiconductor supply chain

The comments come amid growing concerns over the impact of AI-driven demand on global semiconductor supply chains.

Industry groups representing automakers, retailers and electronics manufacturers have warned that rising demand for memory chips could lead to higher consumer prices and supply disruptions, according to IANS.

However, Cook did not specify when the price increases could take effect, how large they would be or which Apple products would be affected.

According to the report, memory and storage components have emerged as key concerns for the iPhone maker, particularly the dynamic random-access memory (DRAM) market, where supplies have tightened as chipmakers allocate more production capacity to high-bandwidth memory used in AI servers.

Cook said increasing volumes of memory supply are being directed towards AI infrastructure, reducing availability for consumer electronics.

Tim Cook further added, "There's less supply at a time when consumers want devices and the memory guys are passing along huge price increases."

Cook said memory pricing and supply need to return to reasonable levels for consumer products.

John Termus to take over as Apple's new CEO

Earlier in April, the US-headquartered firm announced that John Ternus, Senior Vice President of Hardware Engineering, will succeed Tim Cook as Chief Executive Officer, effective September 1, 2026, concluding a long-running succession process that the board approved unanimously.

However, he will transition to the newly created role of Executive Chairman, where he will engage with global policymakers and assist with select company matters.

(With inputs from IANS)