Apple Wants to Buy Blacklisted Chinese Memory. Micron Has Nothing to Worry About

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The AI boom has transformed one of the semiconductor industry’s most cyclical businesses into one of its tightest markets. Memory chips, once plagued by oversupply and collapsing prices, have become one of the biggest bottlenecks for AI infrastructure. 

That shortage has helped lift Micron Technology (NASDAQ:MU), Samsung Electronics, and SK hynix to record profitability as demand for premium memory far exceeds supply. It is in this environment that Apple (NASDAQ:AAPL) is reportedly lobbying the Trump administration for permission to buy memory chips from a blacklisted Chinese supplier.

Micron investors are worried that if a new supply channel is opened, the memory chipmaker’s pricing power, margins, and ultimately its stock could be pressured. However, they needn’t be concerned.

Apple’s Problem Isn’t Micron’s Problem

The Financial Times reported that Apple has been lobbying several federal agencies and officials for approval to purchase memory chips from China’s ChangXin Memory Technologies (CXMT), a company placed on the U.S. Entity List because of its ties to the Chinese government and military. Buying from CXMT is reportedly not outright illegal, but doing so without government approval could expose Apple to political backlash and reputational damage.

Apple’s motivation is easy to understand. The company just announced price hikes of roughly 20% on several MacBook and iPad models after CEO Tim Cook said Apple could no longer absorb rising component costs. Its stock suffered its largest single-day loss in more than a year. Memory has become one of the fastest-growing expenses inside consumer electronics, and Apple has long used its enormous purchasing power to squeeze suppliers for lower prices.

Some investors fear that if Washington grants Apple permission, CXMT could become a new source of supply that weakens Micron’s positioning. 

Here is where their markets actually stand:

CXMT manufactures conventional DRAM products, including DDR5 memory for PCs and servers, LPDDR5X and LPDDR4X for smartphones and mobile devices, and enterprise RDIMM and MRDIMM modules. What it does not manufacture is high bandwidth memory (HBM), the premium chips powering Nvidia‘s (NASDAQ:NVDA) AI accelerators and the data centers behind today’s AI spending boom.

That distinction matters because HBM carries much higher margins than commodity DRAM, and it remains the product driving Micron’s earnings growth.

Apple Helped Create Today’s Memory Shortage

Surprisingly, it was Apple itself that helped create the pricing environment it now wants relief from.

During the last memory downturn, DRAM prices collapsed so far that suppliers, including Micron, saw gross margins sink into negative territory. Apple used its position as the world’s largest memory buyer to negotiate rock-bottom prices. Micron Chief Business Officer Sumit Sadana publicly criticized those negotiations, saying Apple’s purchasing tactics were “not constructive” because they discouraged suppliers from investing in new manufacturing capacity.

Many producers delayed or canceled expansion projects. Then AI arrived.

Exploding demand for AI servers rapidly consumed available DRAM capacity, while HBM production became the industry’s highest priority. Years of underinvestment left the market unable to respond quickly, producing today’s shortage and elevated pricing.

In short, Apple is dealing with consequences that were, at least in part, created by the pricing pressure it once imposed on suppliers.

Congressional Scrutiny Remains a Major Obstacle

Granted, Apple could still receive government approval, but the political hurdles remain substantial.

Apple attempted something similar in 2022 when it considered sourcing memory from another blacklisted Chinese manufacturer, YMTC. Members of Congress immediately warned the company that moving forward would invite legislative repercussions. CXMT carries many of the same national security concerns, making any approval likely to receive intense congressional scrutiny.

Regardless, even if Apple succeeds, the competitive impact on Micron appears limited. CXMT competes in mainstream DRAM, while Micron’s investment dollars are increasingly directed toward high-margin HBM products where demand continues to exceed supply.

Key Takeaway

Apple’s lobbying effort reflects its desire to reduce memory costs after raising hardware prices, not a shift in the competitive landscape for AI memory. CXMT may eventually become another supplier of commodity DRAM, but it does not produce HBM, the segment generating Micron’s strongest growth and profitability.

Ultimately, investors worried this development threatens Micron’s long-term outlook are focusing on the wrong part of the memory market. Apple’s search for cheaper chips says more about its own cost pressures than it does about Micron’s competitive position.

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