Apple to raise prices as AI boom pushes up chip costs

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California: Apple CEO Tim Cook has formally announced that the company can no longer shield consumers from rising production costs, signaling imminent price hikes across upcoming device lineups.

The primary driver behind this shift is the explosive demand for advanced memory chips, which are essential for powering the sophisticated artificial intelligence features now central to Apple's ecosystem.

While Apple has historically absorbed component price fluctuations and inflationary pressures through internal efficiencies, Cook emphasised that this approach has reached its limit.

The massive compute and storage requirements of modern AI have significantly tightened semiconductor supply chains, pushing manufacturing expenses to historic highs.

This adjustment represents a pivotal shift for the company, which has previously maintained stable pricing despite volatility. Analysts suggest the ‘AI tax’ is now impossible to offset, forcing a direct pass-through of costs to the end user as Apple prioritizes margin protection.