GoKawiilApple just announced unprecedented price increases for the majority of its product lineup, with only iPhone and Apple Watch not yet seeing a price hike. This is because of the AI-driven memory crisis, caused by AI data centers buying up loads of memory supply, putting tons of pressure on the market.
Apple tried to hold out for quite a while, but the situation got out of hand. It’s worth noting that these memory pressures have existed for the entirety of the year, and it’s only now getting to the point where it’s unsustainable. Nonetheless, we’ll be diving into the why of it all, and when you should expect things to get better.
Memory supply pressures
As outlined by outgoing Apple CEO Tim Cook in an interview with The Wall Street Journal, Apple simply couldn’t sustain its existing prices anymore with the sudden surges:
“Unfortunately, price increases are unavoidable,” he said. “We’re doing our best to mitigate the huge increases that are being passed to us, and we’ve been trying to shield our customers from the increases, but the situation has become unsustainable.”
As mentioned earlier, this has been exclusively caused by the construction of gigantic AI data centers, which have put tremendous pressure on memory supply. For instance, 32GB of DDR5 memory has essentially quadrupled in price in the past year, with a 6000MHz kit that used to cost under $90 now going for nearly $400.
That’s just to give an idea of consumer pricing – which isn’t necessarily an apples-to-apples comparison. Apple uses higher-end memory, and also has added cost from the complexity that comes from soldering it onto the die of the chipset, rather than having it be a separate component.
Will it get better?
At some point, yes, it’ll get better – but it’s hard to say how long it’ll take.
Micron, a leading memory supplier, has started building a couple new memory fabs across the US, and they’re expected to start coming online over the next couple years – with the final one being up and running by 2030. They’re just one supplier, but any additional supply will help tremendously.
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