Apple CEO says price hikes are ‘unavoidable’ as rising chip costs squeeze tech giant: report

Apple CEO Tim Cook has confirmed that rising costs for memory and storage chips will force the company to raise prices for its devices. Cook told *The Wall Street Journal* that while Apple has attempted to absorb these increases, the situation has become unsustainable. He stated, 'Unfortunately, price increases are unavoidable,' adding that the company has been trying to shield customers but can no longer fully protect them from higher costs. The shortage is driven by high demand for DRAM chips, particularly from AI companies consuming large quantities of memory. Cook noted that supply is tight at a time when consumer demand remains strong, with memory pricing and supply needing to return to reasonable levels. He described the current chip shortage as a 'hundred-year flood,' comparing it to the most severe supply crisis he has witnessed in over 40 years. Apple may use its cash reserves to help expand chip supply, but it has no plans to construct its own memory factories. Research firm TechInsights estimates that Apple could need to add approximately $270 to the next iPhone Pro model to maintain its profit margins. The company's next major product launch, the iPhone 18 lineup, is expected in September. Cook's remarks come as he prepares to step down as CEO on September 1 after 15 years in the role, transitioning to executive chairman. His successor, John Ternus, Apple’s senior vice president of hardware engineering, will take over leadership of the company.