Apple Inc‘s (NASDAQ:AAPL) blowout June-quarter earnings were packed with headlines about record iPhone sales and Apple Intelligence. But one of the most revealing comments came during the Q&A, when CEO Tim Cook described soaring memory prices as a “100-year flood” and suggested the DRAM industry needs more suppliers.

The remarks offer a rare glimpse into how AI demand is reshaping one of the semiconductor industry’s most concentrated markets.

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Apple Says Memory Inflation Forced Price Increases

When asked about pricing, Cook said Apple had little choice but to pass along some of the higher costs.

“We reluctantly raised prices,” Cook said. “We did it because we’re in what I would characterize as a 100-year flood on the memory pricing, with exponential increases in memory prices.”

Cook added that Apple expects those costs to climb further.

“We expect to pay even higher memory costs,” he said, noting that higher DRAM (Dynamic Random Access Memory) prices are only being partially offset by lower costs for certain non-memory components and existing inventory purchased before prices surged.

Chief Financial Officer Kevan Parekh underscored just how significant the issue has become. Without the impact of rising memory costs, Apple’s gross margins would have been materially stronger, he said, adding that memory accounted for more than the entire sequential decline in adjusted gross margin between the March and June quarters and is expected to remain the biggest pressure point into September.

Apple Hints the DRAM Market Needs More Competition

Perhaps the most striking moment came when Cook was asked about Apple’s sourcing strategy.

Rather than focusing on negotiations with existing suppliers, he pointed to the structure of the memory industry itself.

“Primarily the DRAM market has three suppliers,” Cook said. “Obviously if there were more suppliers, that would be good, and it would help us on the supply side and perhaps the pricing side… We’re evaluating all options.”

The comments are notable because Apple rarely discusses supplier concentration publicly.

Today, the global DRAM market is dominated by three manufacturers: Samsung Electronics Co., Ltd. (OTC:SSNLF), SK Hynix Inc. (NASDAQ:SKHY) and Micron Technology, Inc. (NASDAQ:MU). Demand for AI servers and high-bandwidth memory has tightened supply across the industry, giving memory makers significantly more pricing power than in previous cycles.

Cook stopped short of outlining any plans to diversify Apple’s supplier base, but his remarks suggest the company would welcome additional capacity if it became available.

Memory Is Becoming AI’s Next Bottleneck

Apple’s comments point to a broader shift taking place across the semiconductor industry. While AI chips from companies like Nvidia have captured most of the attention, memory has become just as critical to running increasingly powerful AI models. That has tightened supply and pushed memory prices sharply higher across the industry.

Cook’s remarks suggest those higher costs are no longer affecting only memory makers. They are now influencing product pricing and weighing on profit margins even at Apple, one of the world’s largest buyers of chips.

For investors, that’s another sign that AI’s memory suppliers remain in a position of unusual strength, as demand continues to outpace supply.

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