Micron Suggests Apple Helped Cause Memory Price Crisis

[Pezimak]

Micron desperately trying to divert attention and blame elsewhere, nothing to do them of course not........................

 

[mlayer]

Do you not understand the article?

Let me simplify that for you - Apple (and some others) squeezed the company so much that the company didn't have available funds for early expansion which would minimise the impact we are having now. As such, all got shifted which is why we will have this issue for another year or 2 minimum.

If Micron had the same margin as Apple then this would all likely be avoided as the increase would be gradual and therefore the market would be way healthier.

Micron is entirely riding the AI wave and record profits. They broke ground on what will be the largest chip fab in the US earlier this year located near Syracuse, NY. They could've gambled a bit and started the effort a few years ago after the pandemic when interest rate hikes hadn't yet kicked in, like TSMC in Arizona. They chose not to. Apple was their steadiest customer at the time so this was a reasonable position to take. No company is going to invest billions of their own cash reserves on plants if they don't have to. They'll borrow or issue corporate bonds at the lowest rates possible while getting tax incentives from state and federal governments. AI's promise quickly made the gamble worthwhile.

 

[bpb]

Googling this, I see that it could between $15 billion and $20 billion and it will take about 5 years (not including all the permitting).

I don't think that will happen, the question would be, how long would it take apple to recoup the costs to get one of those plants up and running and secondly will one plant be sufficient to supply all of apple's needs

I have no clue on those items, but will say, that what looks easy to us sitting on the sidelines frequently is not.

It's worth noting that $20 billion is just over half a month of revenue for apple. Or alternately just over 2 months of profit. Ie. not a whole heck of a lot of money in the grand scheme for them.

 

[Numbah One]

Micron is seeding an excuse into the news cycle in case there are Congressional inquiries and they are sitting in front of TV cameras and grandstanding politicians blaming them for the unaffordability of phones and laptops while reaping huge profits.

 

[ab2c4]

As with any allegation there is usually a partial truth in it.

 

[Pezimak]

FYI if you look into it, each machine in a FAB can cost OVER 500 million! That is crazy, but it shows just how much money there is in the game to invest tens of billions into ONE factory and earn a profit on the investment.

 

[HouseLannister]

To Apple! The cause of - and solution to - all of life's problems.

 

[LogicalApex]

This is Micron looking for some cover while they juice up based on the current supply crunch.

Apple negotiated long term pricing deals as it is a win win for everyone involved. Prices haven't shifted a ton over the years so the suppliers get guaranteed sales. Apple gets pricing stability for their products. Everyone is happy.

Now that prices are shooting up suppliers like Micron can now tell Apple to piss off which is why we're seeing Apple price increases. They are now making enough money to pay whatever penalties were negotiated into their contract.

But they need a PR scapegoat!

 

[k1121j]

Though i don't like the memory price increases, i cant blame Apple. I blame corporate greed at memory companies for prioritizing the bottom line to make a sale vs investment in the company...... Seems like the worst part of capitalism i see is companies will run themselves in the ground, so share holders can run away with the bag of money.

Please Apple don't end up like this.

 

[Aichon]

I'm sorry, but no. It is not your customers' job to subsidize expansions that benefit their competitors, which is exactly what Micron is suggesting (the company they didn't name that we all know is) Apple should have done here. Had Apple paid more it may have created a little more supply in the market...which Micron would have sold to AI companies. Situation unchanged.

 

[Nyx1]

This the way you must build own your plant if for get bargain power but yeah tim cook is lord global supply let see john ternus how they handle price hike now.

 

[Marx55]

The amazing thing is that then Apple (who buys millions) charges such RAM and SSD at 10 times more price than available in the market for anyone when purchasing one.

 

[jz0309]

Apple has long strong armed suppliers, remember the whole GT Advanced Technologies debacle.

I can't say that I'm surprised by these allegations

You do realize that "strong arming" suppliers have enabled Apple to keep prices for us at the levels they have been until a few days ago.
There are lots of suppliers fighting for Apples business, and if they win it, they strive, despite the "strong arming"

 

[leicaman]

Micron could have made a difference by making more memory. Kind of a no-brainer thanks to the current shortages.

His admissions says, "I'm pretty clueless how to do business."

 

[sevoneone]

RAM is a commodity like Oil. Pricing is based on pure supply and demand.

With Oil, you'll see a major company like a Chevron shut down a refinery to deliberately control the supply side and influence price. Unless you can point at a single Micron, SKHynix or Samsung fab that is sitting idle or not running at full capacity right now, I don't know what argument you can make for any of these 3 companies being the "bad guy" in a legitimate high demand/low supply situation. That would be just as bad as Micron trying to say this is Apple's fault for using advantage when prices/demand was low. You can't blame any of these business for operating like a business.

 

[p96]

So Apple negotiators did their job so well that Micron couldn't to do theirs?

 

[rp100]

WSJ is a rag - they call this journalism?

Please. No one put a gun to Micron’s head and made them produce and sell RAM below cost.

Has everyone forgotten the DRAM pricing scandal???

DRAM industry price fixing - Wikipedia

en.wikipedia.org

Mark my words - after this all blows over, there will be antitrust suits brought against the RAM & SSD manufacturers.

 

[Kyle-Culpepper]

Apple should have bought Micron years ago.

RE: Apple driving a hard bargain
Oh, sure, [teenage eye-roll] Micron would have built out extra fab capacity if their margins were larger from Apple.
Oh, sure, they' wouldn't have just pocketed the profits or given themselves larger paydays

Micron accepted Billion$ from the US government to build out fabs in the US in 2022

They committed approximately $24 billion to expand its wafer manufacturing operations in Singapore on January 27, 2026

Now that they've gone "Whole Hog" on AI Datacenter memory and kicked consumer RAM to the curb, Micron is Spending $200 Billion to Break the AI Memory Bottleneck, spending $50 billion to more than double the size of its 450-acre campus in Boise, ID. They also just broke ground on a $100 billion fab complex near Syracuse.

 

[maflynn]

You do realize that "strong arming" suppliers have enabled Apple to keep prices for us at the levels they have been until a few days ago.

You do realize that before the ram-pocalypse, Apple was long considered very expensive, i.e., the term apple tax is well known.

 

[sevoneone]

Apple should have bought Micron years ago.

Apple was and is not interested in being in a commodity business.

 

[GMShadow]

My bet is Sumit ends up in prison in 3-5 years.

 

[lotones]

micron - "If Apple had allowed us to price gouge them 3 years ago, we would be able to REALLY price gouge people now... which we're doing anyway..." 🙄

 

[buddhistMonkey]

This is just Micron justifying their prioritizing data centers over consumers. Rather than admit the truth — that their chips are scarcer and more expensive because they raised their prices to maximize profits from big A.I. companies — it's important to Micron to demonize Apple, the face of the consumer market, and shift the blame for their high prices onto their customers and consumers instead. Long-term, this might come back to bite them, but for now, there's nothing anyone can do about Micron's exorbitant prices, including Apple.

 

[MrSnirf]

It does not cost Micron or Samsung several times more to manufacture NAND today than it did three years ago. Prices are higher because AI Bros are willing to pay them. That's how supply and demand works.

Micron on Wednesday reported a third-quarter profit of $28.24 billion, or $24.67 a share, compared with a profit of $1.89 billion, or $1.68 a share, a year earlier.

Who's willing to pay? NVIDIA, Microsoft, Amazon, Meta, Google, Alibaba, and increasingly Apple for AI infrastructure. These same companies are signing multi-billion-dollar supply agreements because AI is generating enormous returns. Naturally, memory manufacturers prioritize the highest margin customers, leaving less supply for consumer electronics.

From a business perspective, it makes perfect sense for memory manufacturers to prioritize AI customers willing to pay the highest prices. But consumers ultimately bear the cost. Decades of consolidation have left the memory market dominated by just a few suppliers, and large corporations have significant influence over the policies that govern these industries. Whether through weak antitrust enforcement, subsidies, or lobbying, the result is a market with limited competition and substantial pricing power when demand spikes.

 

[danpass]

Sounds like Micron should have told those buyers to pound sand.

No? The buyers are too big?

Well, in both cases, stop whining.

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