Apple’s upcoming iPhone 18 is expected to carry a higher price tag, a direct consequence of ongoing memory shortages affecting the tech industry. This anticipated price increase reflects the rising costs of memory components, which have been significantly impacted by a phenomenon dubbed “chipflation,” as reported by The Verge.
The memory shortage has reversed a long-standing trend of declining memory prices, which had previously made consumer electronics more affordable. The term “memory shortage” was mentioned in numerous corporate earnings calls last quarter, indicating that the issue is widespread across the industry. Experts suggest that the demand for memory has surged, particularly due to the increasing reliance on artificial intelligence (AI) technologies, which require substantial RAM.
Manish Bhatia, president and COO of Micron, one of the largest memory manufacturers, highlighted the need for increased wafer capacity to meet this demand. He noted that the industry faces challenges that differ significantly from those of previous years, where technological advancements alone could keep pace with demand.
The memory market is currently dominated by a few key players, with Samsung, SK Hynix, and Micron controlling approximately 90% of the market. This concentration has led to a situation where these companies must allocate their limited production capacity between AI infrastructure and consumer devices. As a result, conventional DRAM prices have skyrocketed, with estimates indicating a 300% increase in costs for smartphone memory over the past year.
Apple, known for its ability to command premium prices, has already raised costs across its Mac and iPad product lines. The iPhone 18 Pro is projected to start at $1,299, which is $200 more than its predecessor, the iPhone 17 Pro. This price adjustment comes as Apple prepares to release its high-end models while delaying the launch of its standard iPhone 18 until spring 2027.
Despite the challenges, Apple may be better positioned than many competitors to navigate the memory crisis due to its strong market presence and loyal customer base. However, other manufacturers are facing tougher choices, including reducing production or shifting towards more expensive models to maintain profit margins.
As the memory shortage continues, analysts predict that prices for consumer electronics will remain elevated, with no immediate relief in sight. The long-term contracts signed by AI companies with memory suppliers further complicate the situation, locking in demand that may outpace supply for the foreseeable future.
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