Asian technology stocks slumped on Thursday after Apple announced price increases on MacBooks and iPads by up to 20%, citing an "extraordinary surge" in demand for chips used in AI data centers. The sell-off spread across the region, with South Korea's KOSPI index becoming a canary in the coal mine for tech stocks as traders locked in profits after recent AI-driven rallies. The moves mark the clearest signal yet that the race to build AI infrastructure is beginning to hit consumer wallets.
The price hikes come as a global shortage of memory and storage chips, driven by AI infrastructure needs, pushes up costs across the electronics industry. Apple and Microsoft-owned Xbox both raised prices on the same day, with Xbox increasing prices by up to $150 from August, citing the same memory and storage crunch. It is the second console price increase in less than a year for Xbox.
Analyst Dan Ives of Wedbush Securities described the price hikes as a sign of broader cost pressures. The global memory chip shortage has been fueled by massive demand for AI data centers, which consume vast quantities of high-bandwidth memory chips. Bloomberg reported that the rising component costs are stoking concern that they will curb demand for devices and eventually slow the memory chip rally that has powered much of the AI trade.
Tech leaders and market observers are watching closely to see if other consumer electronics makers follow suit. If the chip shortage persists, it could dampen consumer demand for gadgets and slow the momentum of the AI trade that has lifted global markets. South Korea's 'Ant' Army of retail investors, known for driving an AI market frenzy, now faces a margin call heard around the world, according to Seeking Alpha.
Some analysts argue that the AI-driven chip shortage is a temporary bottleneck as new fabrication capacity comes online. However, Apple's and Xbox's simultaneous price hikes suggest that supply constraints may persist longer than expected.