Apple CEO Tim Cook has confirmed that the company will raise prices due to rising memory chip costs driven by the artificial intelligence boom — According to the BBC, Cook said the situation has become ‘unsustainable’ and that price increases will eventually be passed to consumers. He did not specify when the price hikes would occur or which products would be affected. The iPhone 18, expected to launch in September, is among the potential candidates for a price increase.

AI Demand and Supply Chain Pressures

Memory chips are essential components in smart devices like mobile phones, but the surge in AI development has driven up their prices in recent months. Cook told the Wall Street Journal that ‘there’s less supply at a time when consumers want devices and the memory guys are passing along huge price increases.’ He added that ‘we definitely need memory pricing and supply to return to reasonable levels for consumer products.’

The global foundry market is on track to surpass $328 billion in 2026, according to TrendForce, with total revenue expected to reach $218.8 billion this year alone, a sharp 24.8 percent jump from the previous year. This surge reflects a growing demand for AI computing power, especially from big tech companies like Google, Amazon Web Services, and Meta, who are now building their own AI chips. AI-native players like OpenAI and Groq are also entering the market with custom silicon strategies.

Broader Industry Pressures

Apple is not the only company facing pressure. In an exclusive interview with the BBC, Taiwan Semiconductor Manufacturing Company (TSMC), which produces the most advanced chips for Apple, Nvidia, and AMD, would not rule out price increases as inflation pushes up its costs. Earlier this year, Samsung also warned that memory chip supply shortages would raise the prices of electronic devices.

According to the BBC, the war in Iran has also disrupted the global supply of helium, a gas serious in making semiconductors. This has added to the cost of computer chips and further strained the supply chain. The iPhone 17 has been popular since its launch last September, with Apple device sales growing by 17% in the first three months of 2026 compared to the same period a year ago.

Economic and Productivity Implications

As hardware costs rise, U.S. consumers and corporations are holding onto outdated devices for longer. According to TechSpot, this trend is causing economic strain and limiting productivity. Research from Diversified indicates that 24% of employees have worked overtime due to problems caused by obsolete technology, while 88% say aging equipment restricts innovation.

Supply chain shocks and shifting tariffs have made hardware prices unpredictable over the past few years. The AI boom has also caused companies to rapidly purchase the latest technology, especially memory. Rising RAM prices may encourage manufacturers to raise prices or discontinue certain products. The shortage could last into 2027, according to TechSpot.

Jason Kornweiss, CEO of Diversified, noted that large companies take so long to test new technology that something better might emerge by the time vetting is complete. Cassandra Cummings, CEO of Thomas Instrumentation, suggested that improving repairability and making technology more modular could address the issue without forcing expensive and time-consuming full-system upgrades.