Tim Cook says the company can no longer absorb soaring memory and storage costs as artificial-intelligence infrastructure consumes an increasing share of global semiconductor supplies

Apple is preparing to raise prices across parts of its product portfolio as a global shortage of memory chips drives component costs to levels the company can no longer absorb.

Chief executive Tim Cook said price increases had become “unavoidable” after Apple spent months attempting to protect customers from the higher prices demanded by its suppliers. He did not specify which products would become more expensive, when the changes would take effect or how large the increases might be.

The warning nevertheless represents an unusually direct acknowledgement from one of the world’s most powerful technology companies that the artificial-intelligence boom is beginning to reshape the economics of everyday consumer electronics.

The pressure centres on two essential categories of semiconductor: DRAM, which allows devices to run applications and process information, and NAND flash memory, which provides storage for photographs, software, documents and operating systems.

Both components are found throughout Apple’s product range, including the iPhone, iPad and Mac. As devices become more powerful and incorporate increasingly sophisticated artificial-intelligence functions, they also require more memory.

At the same time, the companies building enormous AI data centres are purchasing memory chips in unprecedented quantities.

Cloud-computing groups and technology giants are competing to secure the high-performance components needed to train and operate advanced AI systems. Memory manufacturers have responded by directing more investment and production capacity towards lucrative data-centre products, tightening the supply available for smartphones, personal computers and other consumer devices.

The result is an increasingly uncomfortable contest between two parts of the technology industry.

Consumer-electronics manufacturers need affordable memory to maintain competitive retail prices. AI infrastructure developers, however, are prepared to sign long-term contracts, provide large advance payments and pay premiums to guarantee access to scarce components.

Even Apple, whose size traditionally gives it considerable leverage over suppliers, is finding that balance more difficult to manage.

Cook said the company had attempted to mitigate the increases and shield its customers, but the cost burden had become unsustainable. His remarks suggest Apple has reached the point at which protecting profit margins will require passing at least part of the additional expense to buyers.

The announcement comes at a sensitive moment for the company.

Apple’s premium pricing strategy has historically depended on persuading customers that its hardware, software ecosystem and long product life justify a higher initial cost. Further increases could test that loyalty, particularly as households in many markets remain cautious about discretionary spending.

The impact will depend heavily on how Apple applies the changes.

Rather than raising the listed price of every device, the company could adjust individual models, remove lower-cost configurations or introduce new products at higher starting prices. It could also increase the price of storage upgrades, where the difference between configurations already represents a significant source of revenue.

Changes of that kind can make products more expensive without appearing as a straightforward increase to an unchanged model.

Some effects are already visible in Apple’s computer range. The company has removed certain configurations and increased the entry price of products where lower-cost memory or storage options are no longer available.

The most closely watched decision will concern the next generation of iPhones.

Apple traditionally introduces its flagship smartphones in September, making the upcoming launch a natural opportunity to revise prices. Premium iPhone models are particularly exposed because they combine advanced processors, high storage capacity and growing memory requirements.

New artificial-intelligence functions may add further pressure. Features that operate directly on a device, rather than relying entirely on cloud servers, require more local processing power and memory. Apple must therefore use more of the same components whose cost has been rising.

That creates a difficult contradiction: AI is one of the principal features technology companies hope will encourage consumers to upgrade, but the infrastructure race behind AI is also making those devices more expensive to manufacture.

Apple’s response could influence the wider industry.

The company is among the world’s largest purchasers of memory and storage components. A public admission that it cannot continue absorbing the increases gives competitors additional justification to raise their own prices.

Computer manufacturers, smartphone brands, gaming companies and other electronics producers face similar pressures. Some have already reduced specifications, eliminated cheaper models or increased retail prices to compensate for more expensive components.

Automakers are also monitoring the market because modern vehicles require growing quantities of memory for entertainment systems, driver assistance, navigation and other digital functions.

The shortage therefore risks extending beyond premium electronics and contributing to wider inflation in manufactured goods.

Memory producers are expanding capacity, but new semiconductor facilities require substantial capital and time. Manufacturers must also decide which type of chip to prioritise. Components designed for AI servers often generate higher returns than those intended for ordinary consumer devices, encouraging suppliers to focus on the most profitable part of the market.

This means that increased production may not immediately relieve the shortage facing smartphone and computer makers.

Apple has substantial cash reserves and can use its financial strength to negotiate supply agreements or support additional capacity. Cook indicated that the company was prepared to deploy its resources to improve availability, although Apple does not plan to construct and operate its own memory factories.

Building such facilities would require specialist manufacturing expertise, years of development and tens of billions of dollars in investment. It would also expose Apple directly to the volatile cycles that have traditionally defined the memory-chip business.

The company is therefore expected to continue relying on major external producers while using long-term contracts, purchasing commitments and its enormous order volumes to secure supply.

Those advantages may allow Apple to obtain components when smaller competitors cannot. They do not, however, guarantee favourable prices when demand across the industry greatly exceeds available production.

For customers, the central unanswered question is how much of the additional cost Apple will pass on.

The company could accept lower margins on some devices while raising prices more sharply on others. Entry-level products may receive greater protection to preserve their appeal, while premium models and high-capacity configurations could carry a larger share of the increase.

Apple may also attempt to soften the impact through trade-in programmes, instalment plans and carrier promotions. Such arrangements reduce the immediate cost perceived by the buyer, even when the full retail price has risen.

Yet the broader direction is now clear.

For years, the rapid expansion of artificial intelligence was discussed mainly in terms of software, productivity and competition between technology platforms. The memory shortage demonstrates that the AI race also has direct physical consequences.

Data centres require vast quantities of chips, electricity, cooling equipment and construction materials. As companies invest hundreds of billions of dollars in that infrastructure, they are placing pressure on supply chains used by the rest of the economy.

Apple’s decision marks a significant stage in that process. The effects of the AI boom are moving beyond corporate investment plans and into the prices paid by ordinary consumers.

The next iPhone, iPad or Mac may therefore carry a visible cost of the global competition to build artificial intelligence—not because the device itself is radically different, but because the memory inside it has become one of the technology industry’s most contested resources.