Why is Tim Cook saying Apple cannot avoid price increases?

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Tim Cook Attributes Unavoidable Price Increases to AI-Driven Memory Chip Demand

Apple CEO Tim Cook has indicated that price increases for the company's products are unavoidable due to the escalating demand for memory chips driven by the artificial intelligence boom. Cook stated that efforts to shield customers from these rising costs have become unsustainable, citing a confluence of factors including reduced supply amidst high consumer demand and significant price hikes by memory chip manufacturers. This situation has been described by Cook as an unprecedented "hundred-year flood" in chip pricing, an event he has not encountered in his extensive career within electronic supply chains.
Surge in Memory Chip Costs Due to AI Data Center Expansion

The rapid construction of artificial intelligence data centers has dramatically increased the cost of memory chips and RAM. These components are essential for nearly all electronic devices. Since late 2025, the price of these chips has seen quarterly increases of at least 50 per cent, creating a substantial upward pressure on manufacturing costs.
Reduced Supply Amidst High Consumer Demand

A key factor contributing to the price hikes is the imbalance between supply and demand. Cook highlighted that there is less available supply of memory chips at a time when consumer demand for devices remains high. This scarcity, coupled with the increased costs passed on by memory chip producers, creates a challenging environment for maintaining current product pricing.
Potential Impact on Product Pricing

While specific details regarding which products will be affected or the magnitude of the increases were not provided, the implications for consumers are significant. A report by the Wall Street Journal, citing research firm TechInsights, estimated that Apple might need to raise the price of its iPhone Pro model by as much as US$270 to preserve its profit margins. This suggests that premium devices could see notable price adjustments in the near future.

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Why is Tim Cook saying Apple cannot avoid price increases?

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