Apple CEO Tim Cook says memory crunch will force price hikes, iPhone 18 could hit $1,299

AI demand fuels memory chip shortage

The surge in artificial intelligence is driving data center expansions, which consume massive quantities of DRAM and NAND memory, the same components found in smartphones, tablets, and laptops. As a result, chip manufacturers are prioritizing large AI customers, leaving consumer electronics firms scrambling for limited supply. Apple CEO Tim Cook described the market as unlike anything he has seen in over 40 years. RAM prices have more than doubled since October 2025, and the war in Iran has disrupted the global helium supply, another critical input for chip fabrication.

There's less supply at a time when consumers want devices and the memory guys are passing along huge price increases.

Cook warns price hikes are inevitable

In a June 17 interview with The Wall Street Journal, outgoing Apple CEO Tim Cook said the company can no longer absorb the rising costs. "Unfortunately, price increases are unavoidable," he stated, adding that Apple had tried to shield customers but the situation had become unsustainable. Cook, who will hand over the CEO role to John Ternus in September, declined to specify the timing or scale of the increases, and would not confirm which product lines would be affected first. However, he stressed that memory pricing and supply must return to reasonable levels.

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.

iPhone 18 Pro price estimates

Attention now turns to Apple's next iPhone launch, expected in September. The WSJ and other outlets report that the iPhone 18 Pro could start at $1,299, a $200 increase over the current iPhone 17 Pro's $1,099. Research firm TechInsights, however, estimates that to maintain its roughly 50% gross margin, Apple would need to add about $270 to the next Pro model's price, which would push it to around $1,369. Other products, including Macs, iPads, and the Apple Watch, are also likely candidates for price adjustments. Apple has already raised the Mac Mini price by $200 earlier this year and discontinued the Mac Studio configuration with 512GB of RAM in March.

Apple explores options, but won't build its own fabs

Cook indicated that Apple is willing to deploy its cash reserves to help secure memory supply, though the company has no plans to build its own memory factories. He also noted that Chinese memory makers could be a supply source, but U.S. national-security rules would require licenses. "Everything needs to be on the table," Cook said, when asked if those restrictions should be eased. Meanwhile, Apple continues to face pressure to deliver on its AI promises after a $250 million false-advertising settlement earlier this year; the recent Worldwide Developers Conference showed progress with an overhaul of Siri, but also pointed to the growing need for more on-device processing power, which in turn demands even more memory.