Analyst KC Rajkumar of Lynx Equity Research characterized Monday’s pre-market declines in Micron Technology (NASDAQ: MU) and Western Digital’s SanDisk (NASDAQ: SNDK) as an overreaction to weekend reports suggesting Apple may source memory chips from Chinese suppliers.
Micron fell 3% in pre-market trading, while SanDisk declined 5%, following reports that the Trump administration could permit Apple to use DRAM from China’s CXMT and NAND flash from Yangtze Memory Technologies Corp. (YMTC) as a diplomatic gesture ahead of President Xi Jinping’s planned U.S. visit. CXMT has been qualified for only one low-volume Mac model and has not met yield requirements for Apple’s iPhones, Rajkumar noted in a Monday note.
Apple has not publicly confirmed any supply changes but stated it is evaluating all options, acknowledging potential benefits from Chinese sourcing for supply and pricing. CXMT’s limited production capacity and poor yields on high-density lpDDR5x DRAM make it unlikely to address Apple’s current shortages, Rajkumar added. YMTC, meanwhile, has not qualified its latest NAND for Apple devices, instead focusing on domestic markets such as Android smartphones and electric vehicles.
Both CXMT and YMTC remain on the Pentagon’s Section 1260H list of companies with alleged ties to China’s military-industrial base, a designation the Commerce Secretary Howard Lutnick told the Wall Street Journal in August was a concern for U.S. companies relying on Chinese memory.
Micron remains the dominant U.S. supplier of the high-density lpDDR5x DRAM required for Apple’s iPhones and Macs, reinforcing its role as the primary source even amid geopolitical tensions.
