Apple CEO John Ternus, in the company’s fiscal report released Monday, February 2, 2024, warned that the cost of memory chips is rising sharply, a trend that could erode the company’s margins.

Context

Ternus noted that the industry is experiencing an unprecedented price surge, with prices higher than those in June, and that Apple has not been as affected due to inventory management and lower costs in other components.

Forecast

He expects further price increases by 2027, citing forecasts from Micron, Samsung and SK Hynix, and warned that if the trend continues beyond the December 2026 quarter, new consequences could arise for the company.

Apple has increased its procurement commitments, which will impact its finances; the cost of production per device is rising, and margins may shrink. The chief operating officer Sabih Khan did not rule out future price hikes for Apple devices, and the company has already adjusted prices in Brazil.