Apple CEO Warns of Memory Price Surge Impacting Margins

Apple Inc. is experiencing systemic pressure on hardware gross margins caused by exponential increases in memory pricing and rising costs for TSMC silicon wafers. During a Q3 earnings call, CEO Tim Cook stated that these cost increases are affecting the company's Mac, iPad, and upcoming iPhone product lines.

Following these disclosures, GF Securities downgraded Apple stock from buy to hold. Analyst Jeff Pu warned that higher costs for 2nm silicon and DRAM/NAND could result in price increases of $200 to $300 for the iPhone 18 Pro and iPhone 18 Pro Max scheduled for September launch.

Pu identified limited hardware iterations and consumer reluctance as additional risks to demand. However, the potential launch of a foldable iPhone Ultra could mitigate some losses by contributing up to seven million sales.