Tim Cook, CEO of Apple, said that the memory chip supply shortage, which caused the company to increase product prices, will not be less serious in the fall.
“It can be said that we are reluctant to increase prices. We do so because we are experiencing a ‘once in a hundred years flood’ in the memory chip market, with prices increasing exponentially,” Tim Cook explained in a meeting announcing Apple’s business results this week.
At the meeting, Apple’s outgoing CEO said that the company will have to pay more for memory this quarter than in the second quarter of 2026. He predicts that the market price of memory chips will continue to increase after September and could further affect the company’s business operations.
According to Chief Financial Officer Kevan Parekh, existing inventory helped partially offset memory costs in the last quarter and will continue to do so in the third quarter of 2026, but the benefits will then gradually decrease.
Apple’s leadership said that the company has just experienced had its best second quarter ever, with iPhone and Mac sales exceeding expectations, up 22% and 29% respectively over the same period last year. Still, the company is facing the challenge of securing supplies of the advanced memory chips used in Apple Silicon chips, which power the A-Series and M-Series processors of iPhones and Macs.
For this quarter, Apple forecasts revenue to grow 9-11% year-over-year, down from the 16% growth seen in the last few quarters. According to TechCrunch, this information worried investors, leading to Apple’s stock price falling 6% in after-hours trading.
Apple CEO Tim Cook in Vietnam on April 16, 2024. Photo: Tuan Hung
In June, Apple raised the price of Macs and iPads by 15-25%, equivalent to an increase from 3 million to more than 30 million VND, just a week after Tim Cook “fenced” that the cost of memory chip components was increasing during the AI fever. “We have tried our best to reduce price increases and protect customers, but things are becoming unsustainable,” he said. Apple’s increase in prices for a series of products in the middle of the year is considered unusual by experts, but is unavoidable due to the scarcity of memory chips.
On July 28, Apple announced its cooperation with buy-now-pay-later service company Klarna (Sweden) to deploy Upgrade – a device rental program applied at Apple’s online store and traditional retail stores in the US. Experts say that the new program helps Apple products become more accessible in the context of rising prices and users tend to keep devices longer.
In September, when Apple continues to face a serious shortage of memory chips, Senior Vice President of Hardware Engineering John Ternus will replace Tim Cook as CEO. Mr. Cook will transition to the role of Executive Chairman and support a number of the company’s activities, as well as work with policymakers globally.