Apple CEO Warns of '100-Year Flood' in Memory Costs Amid AI Demand

Apple CEO Tim Cook described the current memory cost situation as a '100-year flood,' citing exponential increases in prices. He said Apple has already raised prices on Macs and iPads, and expects to pay even higher memory costs in the September quarter.

Cook's statement came during his final earnings call as CEO, where he confirmed that without rising memory costs, Apple's gross margins would have been stronger. The company paid higher memory costs for three consecutive quarters and expects to pay more in the fourth.

The memory cost surge is driven by AI data-center demand, with companies such as Nvidia, Microsoft, Amazon, and Meta buying high-bandwidth memory and advanced DRAM at a pace that has overwhelmed supply. Apple's own products are affected, with the DRAM package in an iPhone 18 Pro costing around $145, compared to roughly $39 for the equivalent package in the iPhone 17 Pro.