Micron’s Chief Business Officer Sumit Sadana publicly blamed aggressive buyer tactics for worsening the current memory chip shortage, pointing to practices well known in the industry. Sumit Sadana told The Wall Street Journal that Micron was unable to fund capacity expansion during the industry’s previous slump, when its margins turned negative partly because some buyers pushed relentlessly for lower prices.
The accusation landed just hours after Apple announced sweeping price increases across its hardware lineup. Macs, iPads, Apple TV, HomePod, HomePod mini, and Vision Pro all rose in price, with increases ranging from $30 for the HomePod mini to $1,300 for the Mac Studio. Apple CEO Tim Cook had forewarned the increases more than a week earlier, describing the shortage as a “hundred-year flood” unlike anything he had seen in more than four decades.
Why the shortage happened
The memory crisis stems from artificial intelligence companies buying massive quantities of high-bandwidth memory for data center servers, forcing manufacturers to prioritize HBM production over the standard DRAM and storage chips that go into consumer devices like Macs and iPads. When the memory market oversupplied in 2023, prices collapsed, driving companies like Micron into negative margins and making further investment in capacity expansion economically impossible.
Sadana said that Micron informed aggressive customers at the time that the pricing pressure was unsustainable: “We told a couple of the customers who were being very aggressive with pricing at that time that this is not constructive.” Apple’s reputation for negotiating long-term purchasing contracts at below-market rates is well established in the industry, and the company has historically used its massive scale and cash position to lock in favorable terms from suppliers, a practice that can squeeze margins across the sector.
The broader cost pressure
Apple is far from alone in raising prices to offset the memory shortage. Microsoft, Samsung, Lenovo, HP, Dell, and other major manufacturers have all implemented increases as supply tightens and costs rise. The difference is that Apple has traditionally absorbed component cost swings rather than passing them directly to customers, making this shift more notable for the company.
Micron’s complaint carries an awkward counterpoint: the company just reported a blockbuster fiscal third quarter with revenue up 346 percent and gross margins approaching 85 percent, undermining the sympathetic narrative around past hardship. The company is profiting handsomely from today’s shortage, even as it accuses Apple of creating the conditions that made this shortage inevitable.
Micron expects the memory shortage to extend through 2027, meaning elevated prices could become the norm for another year and a half or longer. Apple’s stock fell 6 percent on the day of the price announcements, its worst single-day performance in more than a year and erasing roughly $265 billion in market value, a signal that investors saw the increases as a painful necessity rather than a strategic opportunity.
