Apple and Micron are going head to head over the former's plans to procure memory chips from China's YMTC, reports The Wall Street Journal. The Cupertino, California-based consumer electronics giant made headlines this year after it announced a price hike across multiple gadget lineups due to the historic turmoil in the memory industry stemming from the booming demand for AI chips. The Journal's report suggests that Apple is arguing to the White House that by sourcing chips from the Chinese firm, it might be able to reduce prices for Americans.
Micron CEO Sanjay Mehrotra Argues Allowing Chinese Memory Firms In US Supply Chain Could Hamper Domestic Industrial Growth
While multiple reports have suggested that China's CMXT lacks the capacity to globally impact the memory market, Apple's efforts to try to convince the US government to allow it to source produce from the firm have also made rounds. The latest bit on this front comes from The Wall Street Journal, which reports discussions between Apple CEO Tim Cook, Micron CEO Sanjay Mehrotra, Commerce Secretary Howard Lutnick, Treasury Secretary Scott Bessent and other individuals.
According to the details, while Apple and Cook are adamant that they should be allowed to source the products from CXMT, Micron's Mehrotra is arguing that doing so would be damaging to the US industry along the same lines as the damage inflicted by the Chinese steel and manufacturing industries.
Additionally, The Journal suggests that Apple's previous sourcing practices are not helping the current negotiations. Sources quoted by the publication outline that the consumer electronics firm's strategy of procuring memory and other chips at the lowest cost possible and then selling products at premium prices to command high margins has led to "bad blood" being built up between it and Mehtrotra. They add that the contentious nature of the relationship has been present since the Micron CEO's time at storage company SanDisk, where he would avoid meeting Apple's representatives altogether.
Multiple reports over the past couple of months have suggested that Apple is quite interested in working with CXMT to procure products for sale outside of the United States. Earlier this month, the Financial Times reported that the firm was testing CXMT's DRAM chips. A report from Bloomberg claimed that if Apple was successful in sourcing from the Chinese firm, it would primarily be for its products sold in China.
The technology giant's partnerships with smaller companies often lead to the latter's scale being significantly transformed due to its large and lucrative orders. At the same time, the firms are also dependent on Apple to ensure their production equipment runs at high utilization percentages.
About the author: Ramish is a seasoned technology writer and editor with more than a decade of experience. He specializes in semiconductor fabrication and market analysis. With a background in finance and supply chain management - via his bachelors in Finance and a micromasters in supply chain management from MIT - Ramish combines financial rigor with deep industry insight to deliver accurate and authoritative coverage.
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