The Memory Crisis

The memory crisis is having a significant impact on the consumer electronics market, with some key players not hesitating to accuse other companies of contributing to the worsening crisis. The latest example in this regard comes from Micron, which has pointed to Apple as one of the main causes of the crisis.

Micron's Thoughts on the Memory Crisis

According to Micron's Chief Business Officer, Sumit Sadana, the shortage of production capacity in the memory sector can be attributed to some major customers who were "adopting a very aggressive pricing strategy." While Apple is not directly mentioned, the narrative suggests it plays a leading role, especially due to the high number of memory modules the company requires for its products.

Indeed, the Cupertino company allegedly took advantage of a favorable memory cycle to "pay rock-bottom prices." This policy has reportedly blocked investments in the sector in 2023, causing a decline in prices, margins, and, above all, profits for memory producers.

A New Reality

The situation has now reversed, and memory producers are ringing the cash register. Micron has an 85% gross margin and will continue to raise prices. Long-time customers like Apple, who previously aimed for large supplies of memory at low prices, are now forced to pay much more.

The effect of this situation is the price increase announced by Apple. The Cupertino company has not adjusted the pricing for the iPhones, which, however, will now be sold with significantly lower margins compared to the past.