Cook warns before stepping down: "Once in a century" memory price surge impacts Apple's supply chain
Complete. Here is the key summaryApple CEO Tim Cook issued a warning before stepping down, stating that memory chip prices have experienced a "once in a century" surge due to pressure from AI demand. This has forced Apple to raise the prices of Mac and iPad, while also lowering revenue expectations and iPhone sales growth. Although Cook remains optimistic about Apple's future, supply chain shortages have still led to a decline in stock prices of about 8%
Apple Inc. CEO Tim Cook issued a warning during his last earnings call, stating that Apple is facing a "once-in-a-century" surge in memory chip prices, a supply shock that has forced the company to raise product prices and lower revenue expectations.
During Thursday's earnings call, Cook admitted that the company's current supply chain flexibility has significantly narrowed, saying, "In the coming quarter, we will have to scramble on the supply side to fully address various shortages." He pointed out that the strong demand for high-bandwidth memory and advanced DRAM chips from AI data centers is continuously squeezing chip supply in the consumer electronics sector, leading to skyrocketing prices. The DRAM market is currently dominated by Samsung, SK Hynix, and Micron, and Cook stated, "It would be great to have more suppliers," revealing that Apple is "evaluating all feasible options."
To hedge against cost pressures, Apple implemented price increases ranging from $150 to $300 on its Mac and iPad product lines in June. However, supply chain constraints continue to weigh on performance. Apple disclosed that iPhone sales growth for the current quarter is expected to fall to around 15%, significantly lower than the 22% in the previous quarter; total revenue growth is expected to be between 9% and 10%, below analysts' expectations of 12%.
After the earnings report was released, Apple's stock price fell by about 8%. Cook will hand over the CEO position to hardware engineering head John Ternus in September, who stated during the call, "I have never been more optimistic about Apple's future."