Tech news in 3 minutes
Apple stockpiles inventory as it braces for ‘significant supply constraints’
Apple faces a "hundred-year flood" in memory pricing, outgoing CEO Tim Cook warned, as generative AI demand strains hardware supply chains and forces price hikes on iPhones, Macs, and iPads. In its strongest June quarter ever, Apple reported iPhone sales up 22% year-over-year and Mac sales up 29%, but the company is bracing for worsening memory shortages—dubbed "RAMageddon"—that are driving up component costs. The primary challenge is securing advanced memory nodes for Apple silicon chips powering A-Series and M-Series processors. Cook noted on the earnings call that supply constraints will "increase significantly sequentially," leaving Apple scrambling on the supply side. To mitigate shortages, Apple nearly doubled inventory to $11.1 billion from $5.7 billion last September, a break from Cook's long-held just-in-time strategy. The constraints forced Apple to "reluctantly" raise Mac and iPad prices last month, following similar moves by Meta, Samsung, Microsoft, and Sony. For the upcoming quarter, Apple forecasts 9–11% year-over-year revenue growth, down from the prior 16% pace, spooking investors—Apple stock fell 6% in after-hours trading. As Senior VP of Hardware Engineering John Ternus prepares to take over as CEO in September, the company faces a rough patch, though it is not alone in its supply struggles. This news targets readers tracking semiconductor, memory, AI chip, and hardware supply chain impacts, highlighting how generative AI demand is reshaping component pricing and production costs across the tech industry.