AI grabbing goods is too crazy! Apple Inc. (AAPL.US) has finally had its long-held supply chain dominance eroded.

For a long time, Apple Inc. (AAPL.US) has been the dominant giant in the consumer electronics industry, but now, this advantage is beginning to erode. Currently, artificial intelligence (AI) companies are investing heavily in setting up data centers, engaging in bidding wars for chips, storage chips, and other core components, often outbidding Apple Inc. Suppliers who once went all out for this iPhone manufacturer now have the upper hand in negotiations, pushing up component prices and squeezing Apple Inc.'s traditionally generous profit margins. Apple Inc. CEO Tim Cook admitted in a recent earnings conference call that the company is facing pressure related to chip supply constraints and rising storage chip costs. Despite strong iPhone sales and record profits for the company, this statement put pressure on the company's stock price, causing Apple Inc. stock to ultimately close flat that day. This changing landscape is most evident in the global leading advanced chip manufacturer Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US). NVIDIA Corporation (NVDA.US) recently replaced Apple Inc. as Taiwan Semiconductor Manufacturing Co., Ltd.'s largest customer, highlighting the demand for AI businesses reshaping the customer landscape in the semiconductor industry. The storage chip sector has become another major focal point of contradiction. Companies like OpenAI, Alphabet Inc. Class C (GOOGL.US), Meta (META.US), and Microsoft Corporation (MSFT.US) are collectively investing billions of dollars in building AI infrastructure, leading to continued tight supply of dynamic random-access memory (DRAM) and flash memory (NAND). These two types of components are widely used in smartphones, servers, and various electronic devices. Tech market research firm TechInsights estimates that by the end of this year, DRAM prices may skyrocket three times compared to 2023, and NAND prices may more than double. The impact of rising costs on Apple Inc. is already apparent. TechInsights estimates that for storage chips alone, the material cost of the next generation standard iPhone from Apple Inc. may increase by about $57 a significant impact for a device that costs less than $800. For years, with its large purchasing scale and stringent supply chain management, Apple Inc. has always dominated in its cooperation with suppliers, frequently renegotiating procurement prices and even terminating partnerships at any time. However, AI customers are willing to pay premiums, lock in long-term supply agreements, and make advance procurement commitments, giving storage chip manufacturers like Samsung Electronics (SSNLF.US) and SK Hynix stronger bargaining power than ever before. The competitive pressures on Apple Inc. extend to internal resource and talent disputes among suppliers. Engineers who were previously focused on developing smartphone displays, sensors, and various components are now increasingly being reassigned to the development of AI chip-specific materials and hardware. However, Apple Inc. still has its own advantages. Suppliers indicate that working with Apple Inc. is still the industry benchmark, and Apple Inc.'s deep integration of software and hardware leaves room for adjustment. Apple Inc. may also focus more on promoting storage upgrade configurations, a high-profit margin sales strategy; additionally, the company may seek alternative manufacturers for processors with lower technical barriers. Nevertheless, analysts predict that even as costs continue to rise, Apple Inc. will maintain stable pricing for its iPhone products this year. This means that the booming development of the AI industry may force Apple Inc. to absorb cost pressures on its own for the first time in many years, rather than passing them on to consumers.