Apple CEO Tim Cook wants more options for memory chips. Micron investors are taking that personally.
Micron Technology saw its stock slide after Cook made clear that Apple is actively seeking additional memory suppliers, a move that could dilute the pricing power that has made 2026 an exceptionally profitable year for the memory giant. Memory prices have gone vertical, DRAM climbing roughly 60% and NAND surging around 70% earlier in this cycle, and Apple is tired of being on the wrong end of that equation.
The ‘100-year flood’ that broke Apple’s patience
Cook didn’t mince words about the current state of the memory market. He described the pricing environment as a “100-year flood” featuring exponential cost increases that have forced Apple into an uncomfortable position.
Apple has reportedly raised retail prices on key products by as much as 20% starting in mid-2026. For a company that has historically absorbed component cost fluctuations rather than pass them to consumers, that’s a significant strategic pivot.
The explosive demand for high-bandwidth memory driven by AI applications has created a severe shortage across the chip industry. Major memory makers, Micron included alongside Samsung and SK Hynix, have been prioritizing their most profitable AI contracts over sales to the consumer electronics sector.
Enter the Chinese option
Apple is reportedly exploring sourcing memory from Chinese manufacturers CXMT and YMTC, particularly for products sold outside the US. The move has heightened tensions between Apple and Micron, which have a history of political disagreements around Chinese imports.
Apple has reportedly gone further than just exploring options. The company is actively lobbying the Trump administration, including discussions with Commerce Secretary Howard Lutnick, to relax export controls that would make it easier to use Chinese-manufactured memory.
Micron’s counterargument
Micron CEO Sanjay Mehrotra pushed back against Cook’s characterization of the market, suggesting that major buyers like Apple had engaged in aggressive purchasing during earlier industry slowdowns, essentially stockpiling cheap memory when prices were low and now complaining when the cycle turned.
Micron posted record fiscal Q3 2026 results with non-GAAP gross margins hitting 84.9%, driven largely by insatiable AI memory demand. Micron has also locked in 16 strategic customer agreements with five-year terms, suggesting that AI-driven demand isn’t going anywhere soon.