Apple is grappling with skyrocketing memory chip prices, which could impact iPhone costs. DRAM and NAND chip prices are surging due to high demand from AI server builders, with Nvidia now TSMC's biggest customer. This shift comes despite record-breaking iPhone sales, as AI demand outstrips supply, allowing chipmakers to raise prices significantly.

The supply crunch is severe, with major chipmakers like TSMC, Samsung, and SK Hynix operating at full capacity. Taiwanese research firm TrendForce estimates DRAM and NAND prices could rise 90-95% and 55-60% respectively this quarter. Apple, while leveraging its market position, is not immune to these pressures, as acknowledged by CEO Tim Cook on an earnings call.

Despite rising costs, Apple predicts 13-16% revenue growth for the current quarter. Cook hinted at exploring options to mitigate price impacts but did not specify plans. Analyst Ming-Chi Kuo suggests Apple aims to keep iPhone 18 Pro prices flat, prioritizing cost-cutting measures to protect consumers from price hikes.