Apple and Xbox price hikes expose a memory chip crisis

Published: 2026-06-29T10:29:57.000Z

The AI boom has finally reached the one place consumers cannot ignore, the price tag. In just five hours, Apple and Microsoft both rolled out steep price hikes on Macs, iPads and Xbox consoles, blaming an unprecedented memory chip shortage driven by the race to build AI data centres.

The AI boom has finally reached the one place consumers cannot ignore, namely the price tag. In a span of just five hours on a single Thursday in late June, Apple and Microsoft both rolled out steep price hikes on some of their best selling products, and both pointed to the same culprit, an unprecedented shortage of memory chips driven by the race to build AI data centers. Apple raised prices across its Mac and iPad ranges, with many popular models climbing 20 percent or more, while Microsoft hiked Xbox console prices by $100 to $150. The fact that even Apple, with its legendary supply chain prowess and enormous purchasing power, could not absorb the cost sent a shockwave through global markets and knocked its stock down more than 6 percent. The specifics lay bare just how sharp the squeeze has become. Apple's base MacBook Air jumped from $1,099 to $1,299, the lowest spec MacBook Pro rose from $1,699 to $1,999, and the entry level MacBook Neo, introduced earlier this year specifically as a budget friendly option, climbed from $599 to $699. The iPad Air went from $599 to $749. Microsoft, for its part, is raising Xbox prices for the second time in under a year, leaving new consoles 30 to 40 percent more expensive than they were twelve months ago, and it is discontinuing its highest end model entirely. Both companies were blunt about the cause, with an Apple spokesperson saying they had never seen a component price increase this much, this quickly, and chief executive Tim Cook calling the adjustments unavoidable. The underlying problem has earned a darkly theatrical nickname, RAM-ageddon. Memory and storage chip costs have roughly quadrupled since 2025, with DRAM prices alone rising as much as 98 percent in the first quarter of 2026 and projected to climb another 58 to 63 percent in the current quarter. The mechanism is straightforward and a little ironic. Chipmakers like Samsung, SK Hynix and Micron have been redirecting their production toward high bandwidth memory, the specialized chips that feed AI processors in data centers, because that is where the explosive demand and fat margins are. That leaves the consumer grade DRAM and NAND flash inside laptops, tablets and consoles in severely constrained supply, with prices spiking as a result. There is a sharp internal contradiction buried in all this, and Microsoft embodies it perfectly. The company's Azure AI division is among the largest buyers of the high bandwidth memory that is crowding out the chips its own Xbox division needs, meaning Microsoft is simultaneously driving the shortage and suffering from it. The pain is industry wide, with Dell, HP, Lenovo, Asus and even Valve's new Steam Machine all raising prices or trimming memory, and analysts warn the iPhone is almost certainly next. Forecasters at IDC expect the crunch to last well into 2027, with the smartphone market potentially facing its biggest ever annual decline. The regional read is uncomfortably direct for the Gulf. Saudi Arabia and the UAE are pouring tens of billions into building exactly the AI data centers that are gobbling up the world's memory supply, which means the region is both a beneficiary and a contributor to this crunch. As Gulf consumers face the same rising prices on laptops and consoles, there is a certain symmetry in the fact that the data center boom their governments are championing is part of what is making everyday electronics more expensive everywhere.