Sandisk Stock Plummets Amid China Chip Threat

Sandisk stock plummeted by 7.5% on Monday after news broke that the Trump Administration may allow Apple to source memory chips from Chinese suppliers ChangXin Memory Technologies (CXMT) and Yangtze Memory Technologies Corp (YMTC).

YMTC is a direct competitor of Sandisk in manufacturing NAND memory chips, while CXMT focuses on DRAM chips but plans to begin producing 'high-bandwidth memory' (HBM) using stacked NAND chips.

Sandisk's high bandwidth flash memory (HBF) will effectively compete with HBM from CXMT, making both Chinese companies a threat to Sandisk. However, the threat is currently limited to China-centered products and not global.

YMTC plans to raise $4.9 billion in its upcoming IPO to compete with Sandisk, while CXMT has already raised $8.6 billion in a Shanghai IPO to ramp up production.