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Apple CEO Tim Cook has spent more than 40 years navigating the technology supply chain. But in a Wall Street Journal interview on June 17, he said he’s never seen anything like what’s happening to memory chip prices right now.
Cook described the current surge as a “hundred-year flood,” the kind of phrase you reserve for situations that make veterans of an industry pause and recalibrate their assumptions entirely.
The numbers behind the flood
Memory and storage chip prices have quadrupled since 2025. In a recent quarter alone, DRAM prices climbed as much as 40%.
Memory chips are in virtually everything Apple sells. iPhones, MacBooks, iPads, the works. When those components spike in cost, the math on every product line changes fast.
The culprit, according to Cook, is artificial intelligence. The world’s largest cloud providers and AI companies are gobbling up high-bandwidth memory, or HBM, at a pace that has fundamentally distorted the broader chip market. Dominant DRAM suppliers like Samsung, SK Hynix, and Micron are pivoting their production lines toward HBM because that’s where the margins are. AI servers need enormous amounts of specialized memory, and hyperscalers are willing to pay premium prices to get it.
The trade-off is brutal for everyone else. When fabs prioritize HBM for data centers, they produce less of the consumer-grade DRAM and NAND flash that goes into phones and laptops. The result is a projected 15% shortfall in consumer DRAM supply, according to industry estimates.
What this means for Apple’s prices
Apple is not absorbing the hit quietly. Cook confirmed that the company plans to raise prices on its devices, including iPhones, Macs, and iPads, to offset the increased component costs.
TechInsights estimates that passing these costs through to consumers could add roughly $270 to the price of the next iPhone Pro model.
Cook noted that Apple is using its massive balance sheet to secure memory supply, essentially outspending competitors for access to constrained inventory. But he drew a clear line: Apple has no intention of building its own memory fabrication plants.
Cook is set to step down as Apple’s CEO on September 1, 2026. That means whoever succeeds him will inherit a cost structure that looks materially different from the one Cook managed for most of his tenure.
The AI demand engine
Every major tech company, from Microsoft and Google to a growing list of startups, is racing to build out data centers packed with GPUs and the high-bandwidth memory those GPUs require. Capital expenditure on artificial intelligence by major cloud service providers like Google, Microsoft, Meta, and Amazon has surged since 2025, shifting production focus towards HBM necessary for AI applications.
Samsung, SK Hynix, and Micron have responded rationally to these market signals. HBM contracts with hyperscalers offer better margins and longer-term revenue visibility than selling commodity DRAM to consumer electronics brands. So production capacity has shifted accordingly, constraining the supply and increasing the costs of standard DRAM and NAND utilized in consumer devices.
Apple’s situation is not isolated. Microsoft has already implemented similar price increases for Xbox consoles as companies contend with ongoing chip scarcity and rising manufacturing costs. Industry groups have also expressed concerns about broader supply chain disruptions across sectors including electronics and automotive.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
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