Apple to raise prices as AI boom pushes up chip costs
3 days ago
Osmond ChiaBusiness reporter
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Apple CEO Tim Cook said huge cost increases were being passed on to the firm
Apple plans to raise the prices of its products as the cost of the memory chips it uses has surged, the technology giant’s boss has said.
Tim Cook, Apple’s outgoing chief executive, told the Wall Street Journal (WSJ) that price increases were “unavoidable” as the situation around memory chips had become “unsustainable”.
He did not say when prices would rise or which products would be affected. It is also unclear whether the price hikes will affect the iPhone 18, which is expected to be launched in September.
Memory chips are essential components in smart devices like mobile phones, but the boom in artificial intelligence (AI) has driven up their prices in recent months.
Later, US President Donald Trump said that Apple had agreed to work with chipmaker Intel to make its chips in the US.
“I decided to help Intel because we need to design and build our Chips right here in America,” he wrote in a post on his social media platform Truth Social.
The BBC has contacted Apple and Intel for comment.
In August last year, the Trump administration announced that the federal government would take a 10% stake in Intel.
Intel’s shares rose more than 10% when US stock markets opened on Thursday.
‘Less supply’
Speaking to the WSJ, Apple boss Cook said: “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.
“We definitely need memory pricing and supply to return to reasonable levels for consumer products. That’s the bottom line.”
In addition to rising AI demand, the war in Iran has also disrupted the global supply of helium, a gas crucial in making semiconductors, adding to the cost of computer chips.
The average selling price of smartphones globally is expected to rise by around 20% in 2026 to an all-time high, according to research firm Omdia.
Apple’s new phones are likely to cost up to $150 more than the iPhone 17s, as the firm is expected to upgrade their specifications to support new AI features, Omdia’s smartphone market analyst Chiew Le Xuan told the BBC.
Most smartphone brands have already raised prices, pulled back on promotions or cut specifications to protect their profit margins in response to rising costs, he added.
“This is the new pricing reality, not a temporary spike.
