Apple and Xbox Raise Prices Amid Chip Shortage

The increases stem largely from the artificial intelligence (AI) boom. Analysts say the rapid construction of data centres needed to power AI has created soaring demand for components such as RAM (random-access memory), producing an imbalance between supply and demand that forces everyone to pay more. Tim Cook, Apple's outgoing chief executive, told the Wall Street Journal that price rises were "unavoidable" and the memory situation "unsustainable". Even Taiwan Semiconductor Manufacturing Company (TSMC), the world's largest chipmaker, has signalled it may lift its own prices. The pressure is also reshaping politics: Representative Alexandria Ocasio-Cortez argued that Congress should consider breaking up companies that are "far, far too big" and strengthen consumer protections.

Xbox warned that the cost of memory and storage, which has already more than doubled, could double again by 2027, leaving the door open to further increases. Analysts expect other manufacturers to follow: market researchers predict that personal computer and tablet brands may raise prices, cut discounts on entry-level models, or shift toward premium devices. The gaming firm Valve recently abandoned its original price target for its Steam Machine. Some experts believe Apple's loyal customers will absorb the higher costs without much complaint. Ocasio-Cortez, meanwhile, said the 2022 CHIPS Act (Creating Helpful Incentives to Produce Semiconductors), passed before data centres became widespread, was not designed for today's demands, suggesting lawmakers may need to revisit semiconductor policy.