Shares of Micron Technology and SanDisk fell in pre-market trading on Monday after a report suggested Apple was evaluating Chinese memory suppliers, but one analyst called the move an overreaction.
Micron slid 3% and SanDisk dropped 5% in pre-market activity following weekend coverage of Apple’s potential sourcing plans. Both stocks had surged on August 17 after U.S. Commerce Secretary Howard Lutnick told the Wall Street Journal that Washington opposed memory supply arrangements with Chinese firms.
Analyst KC Rajkumar of Lynx Equity Research argued that the selloff was unjustified, noting that China-based CXMT’s DRAM supply is unlikely to address Apple’s shortage of high-density lpDDR5x memory. CXMT’s production is currently qualified for only one low-volume Mac model and remains unqualified for iPhones, Rajkumar said in a Monday note. He added that CXMT’s yield issues on lpDDR5x further limit its ability to supply Apple at scale.
Apple, in a statement, said it is evaluating all options for memory supply, including Chinese sourcing, which could improve supply availability and pricing. The company did not specify which suppliers were under consideration.
CXMT and YMTC, another Chinese memory maker, remain on the Pentagon’s Section 1260H list of companies with alleged ties to China’s military-industrial complex. YMTC’s latest-generation NAND is reportedly allocated for domestic use in Android devices, electric vehicles, and Lenovo notebooks, and has not been qualified for Apple products.
Micron remains the dominant U.S. supplier of high-density lpDDR5x DRAM for Apple’s iPhones and Macs, according to the analyst. The broader context includes geopolitical tensions, with President Xi Jinping’s planned U.S. visit in September expected to address bilateral trade and technology agreements.
