What the AI chip shortage means for your next iPhone
The AI chip shortage is a global squeeze on memory and storage components caused by surging demand from artificial intelligence data centres, forcing consumer device makers such as Apple to pay sharply higher prices and pass more of those costs on to buyers through an inevitable iPhone price increase. This crunch is not about processors alone; it centres on DRAM and NAND memory that AI servers and smartphones both need. As cloud giants rush to build AI infrastructure, they are soaking up supply that once went to phones, tablets, and laptops. Memory manufacturers are prioritising high-margin AI server products, which tightens supply for iPhones, iPads, and Macs. At the same time, helium shortages and wider supply chain issues are lifting production costs. For Apple users, that mix points to an Apple price hike that will show up first in models with higher storage and memory configurations.
Tim Cook calls the cost crunch ‘unsustainable’
Apple has been quietly absorbing rising memory chip costs for several product cycles, but outgoing CEO Tim Cook now says the situation has hit a wall. In interviews with The Wall Street Journal, he described the current supply and pricing pressure as “unsustainable,” stressing that Apple has “done everything to shield customers” from supplier hikes. According to Cook, “Price increases are unavoidable,” as the company faces double-digit to near three-digit percentage jumps in contract pricing for DRAM and NAND memory. Apple must either accept lower margins on flagship devices or push through an iPhone price increase, alongside higher prices for iPads and Macs. The company has a history of subtle changes, such as tweaking base Mac configurations, but the scale of the AI chip shortage suggests more visible list-price moves are coming, especially on premium and higher-capacity models.
How AI data centres are driving up memory chip costs
The core of the problem lies in how AI models are built and run. Training and serving large AI systems require huge clusters of servers packed with GPUs, CPUs, and, crucially, high-bandwidth memory and fast storage. Data centre operators and AI firms are buying massive volumes of DRAM and NAND, creating a structural imbalance in the semiconductor market rather than a brief spike. Chipmakers such as Samsung, SK Hynix, and Micron are directing capacity toward higher-margin AI server memory, leaving fewer chips for smartphones and PCs. At the same time, the price of RAM has more than doubled since October 2025, and a helium shortage is making chip manufacturing harder and more expensive. Research firm Omdia expects average global smartphone prices to rise by about 20% in 2026, underscoring how widespread the impact of the AI chip shortage will be.
When Apple’s price hike is likely to hit
Apple’s immediate challenge is timing: how quickly to move from absorbing costs to raising prices. Analysts say Macs and iPads may see earlier, quieter adjustments, such as higher prices on upgraded storage or memory, before headline iPhone prices move. The iPhone 17 Pro has already seen a £100 price increase, signalling Apple’s willingness to nudge premium tiers upward. Looking ahead, multiple reports and forecasts suggest that the upcoming iPhone 18 family, expected around September 2026, could launch with noticeably higher prices, particularly for Pro models and top storage options. Some projections point to increases of up to USD 150 (approx. RM690), and more than USD 200 (approx. RM920) in certain high-end configurations to keep Apple’s margins intact as memory chip costs surge. Consumers waiting to upgrade may find that skipping a generation now leads to paying significantly more later.
How much more you might pay—and what others are doing
Apple is not alone in facing rising memory chip costs. Sony has already increased PlayStation 5 prices by USD 100 (approx. RM460), and Samsung raised its Galaxy A57 by £30, showing that an industry-wide Apple price hike is part of a broader reset. Uswitch analyst Ernest Doku notes that “the entire smartphone industry is caught in the same squeeze,” as AI data centre demand drives competition for memory chips and lifts the cost of every handset. For iPhone buyers, this likely means higher entry prices for Pro devices, steeper jumps for larger storage tiers, and fewer discounts on previous-generation models. Other brands will follow similar paths, using smaller annual upgrades to justify higher prices. In practical terms, consumers may need to stretch replacement cycles, trade in older devices more actively, or drop to non-Pro models to keep overall spending steady.
