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Apple Faces "100-Year Flood" in Memory Chip Prices
31 Jul
Summary
- Apple warns of significant financial impact from ongoing chip supply constraints.
- Soaring memory chip prices, driven by AI demand, are affecting consumer electronics.
- Global smartphone shipments hit their lowest point since 2013 due to the crisis.
Apple has reported a record June quarter, but executives are sounding alarms about upcoming financial performance. Supply constraints, particularly for advanced chips and rising memory prices, are expected to dampen revenue growth in the current September quarter. The company is experiencing exponential increases in memory costs, described as a "100-year flood" by CEO Tim Cook.
The surge in demand for high-bandwidth memory chips, driven by the AI boom and data center expansion, has strained chipmaking capacity. This has shifted production focus away from consumer electronics, leading to increased prices and delays for devices like smartphones and computers. Consequently, global smartphone shipments have seen their steepest decline since 2013.
While Apple has managed to avoid widespread iPhone price hikes so far, other products like iPads and MacBooks have seen increases. Price hikes for Apple products are becoming increasingly unavoidable. Looking ahead, Apple is preparing to launch an AI-infused Siri, with early user feedback being "phenomenal." A potential paid tier for advanced Siri features through iCloud Plus is also being considered.
