Apple, Micron's Grudge Erupts, China's Alternative Production Capacity May Emerge as the Biggest Winner

BlockBeats News, June 27th - This week, the battle between Apple and memory chip giants such as Micron and SK Hynix has escalated. On Thursday, Apple announced price hikes for products like MacBook and iPad due to a surge in memory prices, stating that it "can no longer protect consumers." Following this announcement, Apple's stock price plummeted, causing a market value loss of approximately $265 billion.

Just the day before, Micron released an earnings report that far exceeded market expectations, leading to a 13% surge in the company's stock price. On the day of the earnings report release, CEO Sumit Sadana of Micron reminisced about the past and hinted that Apple took advantage of its negotiation leverage during the previous industry downturn to significantly push prices down, severely weakening the company's investment capacity and laying the groundwork for the current severe memory shortage. Apple's pricing pressure caused suppliers like Micron and Hynix to incur huge losses in 2022 and 2023, while Apple made over $16 billion in profits during the same period through its iPhone pricing strategy based on different storage capacities.

Market analysis indicates that the longstanding grievances between Apple and memory chip giants suggest that Apple's reluctant price increase may signal uncertainty in their long-term cooperation. On the other hand, Apple has actively sought alternative solutions: lobbying the Trump administration to include Chinese companies like Yangtze Memory Technologies in its supply chain. Analysts point out that this is currently Apple's most realistic solution, as they urgently need Chinese DRAM and NAND production capacity to withstand the rising trend of competitors like Huawei and maintain Apple's market share in China and worldwide.

Public information indicates that Yangtze Memory Technologies is about to go public on the Shanghai Sci-Tech Innovation Board. As a key player in the Chinese DRAM industry, its current production capacity mainly serves domestic Chinese clients. Its core customer base includes Alibaba Cloud, Huawei, Cambricon AI startups, as well as Xiaomi, Lenovo, and other terminal manufacturers. Currently, the company's products focus on general-purpose DRAM, while rapidly shifting towards HBM to support AI computing power.

Based on Yangtze Memory Technologies' IPO prospectus data, in terms of revenue converted to RMB for the latest quarter, Micron is approximately 3.2 times that of Yangtze, SK Hynix is about 4.7 times, and Samsung Memory is about 6.7 times. Yangtze Technology still lags behind the leading companies in terms of revenue. However, in terms of profitability, Yangtze can already compete with those leading companies.