AI infrastructure surge begins squeezing Apple’s component costs — company considering supplier other than TSMC for lower-end chips, report claims

Apple is facing rising component costs due to the surge in AI infrastructure demand, impacting its leverage over suppliers like TSMC. The company is considering alternative suppliers for lower-end chips to mitigate costs. Memory price hikes are affecting Apple's bottom line, with estimates suggesting the upcoming iPhone 18 could see a $60 increase in combined DRAM and NAND costs compared to the iPhone 17. Apple's traditional strategies of negotiation and product mix adjustments may no longer be sufficient to offset these cost pressures as suppliers prioritize AI infrastructure contracts.