Memory Stocks Plummet on Report of Apple's Potential Chinese Sourcing Deal

Memory stocks are experiencing a downturn on Monday morning following reports that Washington may allow Apple to source memory chips from Chinese suppliers. This policy shift would likely affect U.S. and Korean players in the industry, which dominate the market.

SanDisk stock is down by 9% to $1,458.29, with Micron Technology shares also falling 7% to $897.86 in early trading. Western Digital stock has dropped 7% to $429.49, while SK Hynix has decreased by 5% to $154.48.

The Roundhill Memory ETF is down 7% to $53.62, mirroring the individual stocks and indicating that traders are not distinguishing between NAND and DRAM exposure. Analyst KC Rajkumar of Lynx Equity Research believes this selloff is an overreaction, citing supply constraints and qualification gaps that limit the threat posed by Chinese memory suppliers.

Rajkumar's analysis suggests that CXMT has only qualified for one low-volume Mac product, not iPhones, and has poor yield on high-density DRAM. YMTC has allocated its latest-generation NAND to domestic customers, including Android smartphones and electric vehicles.