Apple seeks U.S. approval to bypass Micron and Sandisk, opting for cheaper DRAM chips from Chinese supplier CXMT, pressuring Micron’s margins.
Micron (NASDAQ: MU) stock declined 2% Monday after reports Apple is seeking U.S. government permission to purchase DRAM chips from China’s CXMT instead of Micron and Sandisk (NASDAQ: SNDK). DRAM demand drives half of Micron’s profit margins, raising concerns over pricing power and supply constraints.
Analysts note DRAM and NAND supply remains below end demand, but regulatory hurdles could limit Apple’s ability to switch suppliers. The move signals potential broader shifts in memory chip sourcing, threatening Micron’s market position.
Shares extended losses despite a supportive note from Mizuho analyst Jordan Klein, highlighting investor unease over demand durability and competitive pressures.