Sandisk Stock Drops as Trump Administration Considers China Memory Chip Deals

Sandisk's stock dropped 7.5% on Monday after news emerged that the Trump Administration may permit Apple to buy memory chips from Chinese suppliers ChangXin Memory Technologies (CXMT) and Yangtze Memory Technologies Corp (YMTC).

YMTC is the more direct threat, as it competes with Sandisk in the manufacture of NAND memory chips. CXMT focuses on making DRAM chips, but plans to begin producing high-bandwidth memory (HBM), which will compete with Sandisk's high bandwidth flash (HBF) memory.

However, according to analyst KC Rajkumar, neither YMTC nor CXMT pose a serious threat yet, as Apple has not certified many of their products and they do not have the production capacity to challenge Sandisk. Nevertheless, YMTC plans to raise $4.9 billion in an IPO to compete with Sandisk.