Micron’s chief business officer has suggested that Apple’s aggressive supplier negotiations may have played a role in the global memory shortage. Sumit Sadana explained that Micron struggled to fund capacity expansion during a previous industry slump due to negative margins, which were partly caused by buyers pushing for lower prices. Sadana noted that some customers were overly aggressive with pricing, leading to a shutdown of industry investments in 2023. Micron supplies memory components to Apple, which is known for securing favorable terms through long-term contracts. Sadana’s comments coincided with Apple’s announcement of price hikes across its hardware lineup, excluding the iPhone, Apple Watch, and AirPods. Apple’s stock dropped significantly, losing about $265 billion in market value. CEO Tim Cook had previously warned of unavoidable price increases due to rising memory and storage costs, describing the shortage as unprecedented. He highlighted the competition between consumer products and AI servers for limited supply, emphasizing the need for pricing to stabilize before Apple’s prices could decrease.
Did Apple’s Negotiations Trigger the Memory Price Crisis?
