Micron Stock Dives on Apple-China Memory Chip Deal

Micron Technology (MU) stock plummeted by 5.5% in early morning trading on Monday, amidst reports that the Trump Administration has allowed Apple (AAPL) to purchase memory chips from Chinese suppliers ChangXin Memory Technologies (CXMT) and Yangtze Memory Technologies Corp (YMTC).

The news is not a direct threat to Micron's global market share, as the Chinese-made chips would only be used in Apple products sold within China. However, this development poses a significant challenge to Micron's market share in China and potentially other countries where Chinese-made Apple products are exported.

Lynx Equity Research analyst KC Rajkumar dismissed concerns about the quality of Chinese memory chips, citing their inability to scale production sufficiently to meet Apple's needs. However, CXMT has recently raised $8.6 billion through a Shanghai IPO and plans to invest in ramping up production immediately, which may change the landscape for Micron investors.