Apple reported its best-ever March quarter with $111.2 billion revenue and strong iPhone and services growth. However, CEO Tim Cook warned that surging memory costs driven by AI demand will pressure margins in coming quarters. With suppliers prioritising AI servers, Apple expects rising input costs to increasingly impact its business outlook.
Apple delivered its strongest March quarter, but tempered the celebration with a stark warning - surging memory costs driven by the AI boom are expected to squeeze the company's finances throughout the rest of 2026, and the pressure is only going to grow.
The AI memory crisis squeezing Apple's supply chain
'Significantly higher memory costs' is how Cook described what Apple is bracing for in the June quarter and beyond. He warned that after June, memory costs will 'drive an increasing impact' on Apple's business.
The root cause lies in the AI boom. Chip makers including Samsung and SK Hynix are prioritising memory production for AI servers, snapped up by hyperscalers like Microsoft, Google, Meta, and Amazon, over consumer electronics. The result is a supply squeeze that has sent memory prices soaring. Taiwanese research firm TrendForce has estimated that conventional DRAM contract prices have jumped as much as 90 to 95 percent quarter over quarter, while NAND prices have risen as much as 55 to 60 percent. A February report from Counterpoint Research suggested DRAM prices jumped 80 percent to 90 percent in just the first six weeks of 2026 alone.
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