Quick Read
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Apple is reportedly targeting Chinese fab CXMT for LPDDR5X memory, threatening Micron’s $12 billion mobile segment despite its 85% gross margins.
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SanDisk and Western Digital sold off sharply as Apple’s CXMT talks erased the assumption Chinese supply cannot undercut memory pricing floors.
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Carter Worth flagged four 20% drops in Micron since March and warned normalized margins could collapse from 85% toward 29% as capacity floods in.
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The story rippling through memory stocks this week began on CNBC’s Fast Money on June 29, where the panel dug into a report that Apple is trying to source memory chips from Chinese manufacturer CXMT. The company Apple (NASDAQ:AAPL) wants to buy from is not yet on the US entity list, unlike YMTC, which already is.
For Micron Technology (NASDAQ:MU), whose Mobile and Client segment just did $11.521 billion in a single quarter, that is a shot across the bow.
An Apple exit would blow through Micron’s mobile book
Micron’s fiscal Q3 2026 revenue landed at $41.456 billion, up 345.7% year over year, non-GAAP EPS at $25.11, and GAAP gross margin at 84.6% against 37.7% a year earlier. Guidance was, if anything, more startling. $50 billion in revenue and $31 in EPS for the next quarter. CEO Sanjay Mehrotra called out “multi-year Strategic Customer Agreements” that he said would make the earnings stream more durable, and the numbers, per the Q3 8-K press release, do back him up.
Now imagine Apple, the world’s most powerful buyer of LPDDR5X mobile memory, quietly pointing a slug of that demand at a Chinese fab that undercuts everyone on price. Apple sits on a $4.31 trillion market cap and, according to Tim Cook, is fighting through what he called a “100-year flood” in memory pricing. Cheaper Chinese chips solve his margin problem. They also punch a hole in Micron’s most consumer-exposed segment.
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The cycle Carter Worth is worried about
On the CNBC panel, Christina Partsinevelos made the counter-case that Micron’s real growth engine is high-bandwidth memory for AI training, which dwarfs iPhone DRAM in both dollar terms and margin. She noted that “just 3 years ago, Micron was losing money on every chip,” and now “gross margins are well above 80%.” That gap is the whole problem. Margins that fat are an invitation for every competitor with a fab to add capacity, and the host warned that “you could see this collapse and prices take effect way before supply hits the market.”
