Micron’s chief business officer suggested, without naming him, that Apple’s difficult negotiations with suppliers contributed to the conditions that caused the global memory shortage.
In the remarks made to The Wall Street Journal On Wednesday, Sumit Sadana said Micron was unable to finance capacity expansion during the industry’s previous crisis, a period when its margins turned negative, in part because some buyers relentlessly pushed for lower prices.
We told a few customers who were very aggressive on pricing at the time that this was not constructive. Many industry investments were halted in 2023 due to very low prices and very low margins.
Micron is one of Apple’s memory suppliers, supplying some of the DRAM and NAND flash chips used in iPhones, Macs and iPads. Apple has a reputation for obtaining favorable terms from suppliers like Micron through long-term purchasing contracts.
Sadana’s comments came just hours after Apple unveiled a wide-ranging series of price hikes that affected nearly every part of its hardware lineup. The price of products in the Mac, iPad, Apple TV, HomePod and Vision Pro lines have all increased, with only the iPhone, Apple Watch and AirPods remaining intact. Apple stock closed down 6% on the same day, its worst single-day performance in more than a year, wiping out about $265 billion in market value.
Apple CEO Tim Cook had warned of this outcome more than a week earlier in comments to the same publication, warning that price increases had become inevitable given the pressure on the company over memory and storage costs. Cook said Apple had tried to protect its customers from the worst but had reached a breaking point, describing the shortage as a “100-year flood” unlike anything it had seen in more than four decades. He pointed to increasing demand for high-bandwidth memory used in AI servers, saying consumer products were now competing for a shrinking supply pool and prices had to come back to earth before Apple’s own prices could follow.
