Apple's China Sourcing Strategy May Not Be as Threatening as Thought

SK Hynix's stock price has declined by approximately 20% since its year-to-date high, largely due to risk-off sentiment ahead of Nvidia's earnings on August 26 and Samsung's shareholder-return plan.

The decline may also be attributed to Apple's reported interest in using Chinese DRAM from ChangXin Memory Technologies (CXMT), which could potentially threaten SK Hynix's share of the market.

However, recent reports indicate that CXMT quoted prices comparable to or above those offered by Samsung and SK Hynix, meaning Apple may not achieve the price advantage it was seeking.

While this development could ultimately reinforce the pricing power of established suppliers, investors should still watch Apple's search for alternative DRAM closely, as securing another source of DRAM can help reduce reliance on existing suppliers in a tight memory market.