Apple Faces Soaring Memory Prices as AI Demand Puts Pressure on the Industry

The global race for artificial intelligence is having consequences far beyond data centers. Memory components, essential to smartphones, computers and servers, are facing growing supply constraints and rising prices.

Apple is not immune to these market pressures. During its latest financial results presentation, the company’s CEO John Ternus described the current memory market situation as “unprecedented.”

To secure its supply, Apple has significantly increased its purchasing commitments with suppliers. Its manufacturing-related commitments have risen by $33 billion, reaching a record $89.7 billion.

This increase comes as AI companies consume an increasingly large share of global manufacturing capacity.

Apple now expects gross margins of between 45% and 46% for its holiday quarter, compared with 47.9% in the previous quarter. The company must also manage the growing costs associated with developing its artificial intelligence services.

In the longer term, these pressures could eventually affect the prices of future iPhones, iPads and Macs, although Apple still has considerable purchasing power when negotiating with its suppliers.