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The iPhone just got a lot more expensive to build. Apple CEO Tim Cook told the Wall Street Journal on June 17, 2026, that price increases for the company’s upcoming iPhone 18 Pro are “unavoidable,” pointing to a global memory chip shortage that has driven component costs to levels the company can no longer quietly eat.
Analysts now expect the base iPhone 18 Pro to land somewhere between $1,299 and $1,399 in the US.
What’s actually happening with memory chips
DRAM and NAND flash memory have seen prices surge between 63% and 75% year-over-year. The culprit isn’t another pandemic-era logistics meltdown. This time, artificial intelligence is the bottleneck.
AI data centers are vacuuming up memory chips at an extraordinary rate. Training and running large language models requires massive amounts of high-bandwidth memory, and the companies building AI infrastructure are willing to pay a premium to secure supply. That leaves consumer electronics manufacturers like Apple competing for what’s left.
According to reporting from TechInsights and the WSJ, a 12 GB DRAM module that previously cost roughly $39 now runs approximately $145. Across the entire bill of materials for memory and storage, costs have climbed around 25%.
Cook had actually been telegraphing this problem for weeks. Back in May 2026, he noted that supply constraints were already affecting products like the Mac mini and Mac Studio, linking those issues to the same AI-driven memory demands now hitting the iPhone pipeline.
Why this shortage is different
Memory manufacturers like Samsung, SK Hynix, and Micron have been prioritizing high-margin AI server chips over consumer-grade components. The result is a supply chain where Apple is effectively competing against Microsoft, Google, Amazon, and Meta for the same raw materials, except those companies are buying memory for AI clusters that generate revenue per query, while Apple needs it for phones that generate revenue once at the point of sale.
What this means for investors
On the margin side, a 25% increase in memory component costs doesn’t automatically translate to a 25% hit to profits, but it does compress margins unless retail prices rise proportionally. Cook’s public acknowledgment that price hikes are unavoidable suggests Apple’s internal math concluded that maintaining current pricing would do more damage to the bottom line than risking a volume decline.
Samsung, which makes both the chips and the phones, has a natural hedge that competitors lack.
Investors watching Apple specifically should track two things: pre-order data when the iPhone 18 Pro launches, which will reveal whether demand holds at the higher price point, and gross margin guidance in Apple’s next earnings call, which will show how much of the cost increase Apple is actually absorbing versus passing through.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
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