Apple CEO says price hikes are ‘unavoidable’ as rising chip costs squeeze tech giant: report

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Apple customers may soon pay more for their favorite devices as the company faces soaring costs for memory. storage chips.

The tech giant's CEO, Tim Cook, toldThe Wall Street Journalthat Apple has tried to absorb the increases. can no longer fully protect customers from higher prices. Cook did not say when prices would rise or which products would be affected.

"Unfortunately, price increases are unavoidable," Cook told the outlet. "We're doing our best to mitigate the huge increases that are being passed to us,. we've been trying to shieldour customersfrom the increases, but the situation has become unsustainable."

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Apple’s next major product launch is expected in September. when the company is likely to unveil its iPhone 18 lineup.(Kyle Grillot/Bloomberg via Getty Images / Getty Images)

Apple’s nextmajor product launch is expected in September, when the company is likely to unveil its iPhone 18 lineup.

The remarks come as artificial intelligence (AI) companies buy up huge amounts of memory. storage chips, according to The Wall Street Journal.

Research firm TechInsights estimates Apple would need to add about $270 to the next iPhone Pro model to maintain its profit margins. the outlet reported.

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Apple CEO Tim Cook said the company can no longer fully protect customers from higher prices.(David Paul Morris/Bloomberg via Getty Images / Getty Images)

Cook said DRAM chips are a key concern because more of them are now being used for AI servers.

"There's less supply at a time when consumerswant devicesand the memory guys are passing along huge price increases," Cook told The Wall Street Journal. "We definitely need memory pricing and supply to return to reasonable levels for consumer products. That's the bottom line."

Apple may use its cash reserves to help expand chip supply, Cook said,. thecompany doesnot plan to build its own memory factories.

"This is a hundred-year flood," said Cook. "I've never seen anything like it in any area in over 40 years."

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The remarks come as artificial intelligence companies buy up huge amounts of memory. storage chips.(Kevin Carter/Getty Images / Getty Images)

Apple announced earlier this year that Cook will step down on Sept. 1 after 15 years as chief executive.

He will transition to executive chairman of the company’s board of directors. will be succeeded by longtime Apple veteran John Ternus, the company’s senior vice president of hardware engineering.

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Apple could not immediately be reached by FOX Business for comment.

FOX Business' Bonny Chu contributed to this report.

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