Tech news in 3 minutes
Tech's memory crisis
Apple CEO Tim Cook announced upcoming price increases on Apple products due to a global memory shortage driven by AI demand. In an interview with the Wall Street Journal published on Wednesday, Cook called the hikes "unavoidable" and the memory situation "unsustainable." The shortage affects DRAM (short-term data storage) and NAND (long-term storage), as AI chips from Nvidia consume vast amounts of high-bandwidth memory, diverting production capacity from three main suppliers: Micron, SK Hynix, and Samsung. For each unit of high-bandwidth memory made, suppliers forgo three units of conventional smartphone memory. Analysts expect Apple to raise prices on premium devices like the $999 iPhone Pro and $1,199 iPhone Pro Max by $100, while leaving lower-end models unchanged. BofA Securities also forecasts price increases for most Mac and iPad models. Average smartphone prices are predicted to rise 20% this year. However, some analysts see an opportunity for Apple to gain market share from Android manufacturers, who may be forced to cut specs or raise prices. Apple has recently targeted budget-conscious consumers with the $599 MacBook Neo and $599 iPhone 16e. Cook declined to specify when or which devices would see price hikes. He noted Apple could use its cash reserves to help increase supply. The announcement comes less than three months before Cook steps down as CEO, underscoring the severity of the shortage. IDC analyst Francisco Jeronimo said, "The world is being disrupted by AI... we are already paying the bill." Memory suppliers are building new factories, but additional capacity is expected to take years to come online.