The supply of memory chips will remain challenged for the foreseeable future, but Micron Technology, a leading maker of the chips, isn't taking all the blame.

Demand for memory has soared alongside the boom in artificial intelligence, leading to supply shortages. The price of memory chips have jumped as a result, with Micron and its Korea-based peers, Samsung and SK Hynix reaping the benefits.

Meanwhile, makers of consumer tech, notably Apple and Microsoft, are feeling the pain of these cost headwinds. Apple and Microsoft each instituted sweeping price increases last week.

"Unfortunately, console storage and memory prices have increased by more than 2.5x and we expect another doubling by the fall of 2027," Microsoft said as it raised prices on its Xbox videogame console by $100 to $150. "The entire consumer electronics industry is struggling with the current components crisis, but the effects are particularly hard on consoles."

Apple CEO Tim Cook told the Wall Street Journal that pricing actions were becoming unavoidable and that "there's less supply at a time when consumers want devices and the memory guys are passing along huge price increases."

As the price hikes roll out, Micron says it never had to get this bad.

In an interview with Barron's, Micron Chief Business Officer Sumit Sadana said that purchasing decisions made by some large customers in 2023 are partly to blame for today's constrained supply. He points to the crash in memory prices coming out of the pandemic, as demand for PCs and other electronics fell.

"Certain customers used that opportunity to drive pricing well below market prices," Sadana says. "And in fact, prices were driven to one third of the prices that existed just a year before."

Micron told certain customers at the time that the pricing changes would lead to eventual shortages since Micron wouldn't be able to invest in long-term projects to bring on more supply.

"Unfortunately, having a more reasonable pricing environment was not a particular priority for those few customers," he said. He declined to name the customers.

His comments follow the wave of high-profile price increases from not just Apple and Microsoft, but also from HP Inc., Dell Technologies, Nintendo, and Samsung.

For now, Apple's hikes haven't included its iPhones, but the next wave of phones due in September are expected to come at a higher cost.

"As far as smartphone pricing is concerned, I do want to point out when these prices went down by two thirds in 2023, nobody saw a reduction in smartphone pricing," Sadana says. "So when prices go up from memory, I don't see why it has to then follow that prices have to go up of these products, but it's just an observation. Of course, every company has to decide how to price its own products."

Apple didn't respond to Barron's request for comment on Sadana's statement.

Apple's price hikes caught much of the industry by surprise given their size and scope. MacBooks went up by as much as 18%, while the company's Apple TV streaming device saw a more than 50% price hike, to $199.

"Apple has always run their supply chain very strategically and somewhat brilliantly, says Michael Goulder, a professor at the Weatherhead School of Management at Case Western Reserve University. "It is rare that they get caught in a trap like this. They didn't see it coming. Most of the world didn't see it coming,"

Sadana told Barron's that the explosion of AI made planning next to impossible, an issue compounded by the pricing decisions made by customers.

He said the company is doing all it can to increase supply, including building new chip-making factories. Micron projects that its first new Idaho factory will begin producing DRAM chips in 2027.

Write to Angela Palumbo at angela.palumbo@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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June 30, 2026 10:59 ET (14:59 GMT)

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