Apple to raise prices as AI boom pushes up chip costs

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.

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.

"There's less supply at a time when consumers want devices and the memory guys are passing along huge price increases," said Cook, who is due to be replaced by John Ternus as Apple's CEO in September after 15 years in the role.

"We definitely need memory pricing and supply to return to reasonable levels for consumer products. That's the bottom line."

The price of Ram - typically one of the cheapest computer components - has more than doubled since October 2025.

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."

Othertechnology giants have also highlighted pressure in the chipmaking industry.

In an exclusive interview with the BBC this month, Taiwan Semiconductor Manufacturing Company (TSMC) would not rule out price increases as inflation pushed up its costs.

TSMC makes the most advanced chips designed by companies such as Apple, Nvidia and AMD.

Earlier this year, Samsung said that it expects memory chip supply shortages to make electronic devices more expensive.

In April, Sony raised the price of its PlayStation 5 consoles by £90 in the UK and $100 in the US as a result of "continued pressures in the global economic landscape".

Nintendo later said it would increase the price of its Switch 2 from September due to "changes in market conditions".

The iPhone 17 has been popular since the lineup was launched last September. Sales of Apple devices grew by 17% in the first three months of 2026 compared with the same period a year ago, helped by strong demand in China.

Apple removed the entry-level option of its Mac Mini compact computers, raising its starting price by about $200 (£150) earlier this year.