Apple and Xbox Raise Prices on Chips

The main reason is the boom in artificial intelligence (AI). Companies are building huge data centres to run AI systems, and these centres need vast amounts of memory chips such as RAM (random-access memory). This has created a shortage, pushing prices up for everyone. Tim Cook, Apple's departing chief executive, called the increases "unavoidable" and described the memory situation as "unsustainable". Even TSMC (Taiwan Semiconductor Manufacturing Company), the world's biggest chipmaker, has hinted that it may charge more too.

Xbox warned that memory and storage costs, which have already more than doubled, could double again by 2027, so further price rises are possible. Analysts expect other computer and tablet makers to follow, either raising prices or offering fewer discounts on cheaper models. Some experts think Apple's loyal customers will accept the higher prices without much complaint. Meanwhile, Representative Alexandria Ocasio-Cortez has urged Congress to consider breaking up the largest technology firms and updating the 2022 CHIPS Act, which she says was written before data centres became so common.