Tim Cook isn't the only CEO shocked by the soaring cost of memory. Elon Musk said he's never seen anything like it.
The Tesla CEO posted a quote on X from the Apple CEO, who earlier this month had said the memory shortage is "a hundred-year flood" and that he'd "never seen anything like it in any area in over 40 years."
Musk said he agreed with Cook. He wrote on Thursday that it's the "biggest price jump in anything I've ever seen."
The soaring demand for chips, which are widely used in consumer electronics, and the resulting costs, have eaten into company margins, leading many to raise prices.
The heart of the issue is the AI boom, which has strained memory chip production as deep-pocketed hyperscalers and data center buildouts increase demand. That's led to skyrocketing memory costs and lower supply for many consumer electronics companies, which have begun passing those added costs onto shoppers with price hikes.
Apple took the rare step of raising the prices of MacBooks, iMacs, iPads, HomePods, and the Apple TV box on Thursday, boosting some by as much as $300. Microsoft's Xbox did the same. It announced Xbox game consoles would be $100-$150 more expensive beginning August 1.
So what's the solution? Musk stated the obvious.
"The production shortfall relative to demand is insane. MUCH higher production is needed," he wrote on X.
The Tesla CEO has earlier talked about the potential impact of the memory chip shortage in the context of needing to ensure his company has the supply it needs to build out its AI ambitions.
During Tesla's Q4 earnings call in January, Musk said Tesla could become "limited by supplier output of chips" and added that "memory is an even bigger limiter than AI logic."
Partially to address this concern, Musk earlier announced the Tesla Terafab joint project with SpaceX and Intel, a multibillion-dollar initiative to build out a chip production facility "combining logic, memory and advanced packaging under one roof."
Read next
Steven Tweedie is a Deputy Executive Editor at Business Insider. He launched the Business News desk in early 2020 and helped grow it into the Trending and Tech News desk, a fast-paced reporting powerhouse that tackles the biggest business and tech stories of the day in an approachable way. He now oversees the Business News desk, Corporate team, and Weekend desk. He works out of the New York newsroom and helps train fellows and new hires at all experience levels in addition to his daily editing duties.He began his career covering app startups and gadgets on the Technology desk at BI. His past reporting and scoops have been cited or syndicated by publications including the WSJ, Associated Press, CNN, Bloomberg, The Guardian, and Forbes. He attended the University of Michigan, where he studied economics and writing, and now lives in Brooklyn.While passionate about editing and helping lead the newsroom's daily business coverage, he also puts on his reporting hat every now and then to chase down a scoop — so don't hesitate to reach out!Have a news tip? Email Steven from a non-work email at [email protected]Follow him on X and Threads for the latest.Featured work:▲Leaked memo: Wayfair CEO tells employees to expect long hours 'blending work and life' (scoop) ▲ Magic Leap's CFO is stepping down after it was 'mutually decided' it was time for someone new (scoop)▲ 48 hours after raising $500 million, Magic Leap called the cops to say an employee had stolen $1 million (scoop)▲ A conversation with the father of virtual reality about the changing culture of Silicon Valley▲ The future of virtual reality is here▲ The first details on the executive shakeup planned for Yahoo once its deal with Verizon closes (scoop)▲ What it's like to log in to computers in North Korea, which run look-alike Mac software called 'Red Star 3.0'
