Memory stocks slide 9% as Apple weighs Chinese chip sourcing

Memory stocks fell as much as 9 percent Monday after reports Washington may let Apple source DRAM from China's CXMT and NAND from YMTC, threatening the US and Korean suppliers that dominate the market.

"CXMT supply is unlikely to dent the shortage Apple is facing in DRAM, nor could CXMT supply improve Apple's negotiation position at traditional suppliers such as MU," KC Rajkumar of Lynx Equity Research wrote, calling the selloff an overreaction.

Micron Technology fell about 7 percent to $897.86 in early trading, SanDisk dropped 9 percent to $1,458.29, and Western Digital slipped 7 percent to $429.49. SK Hynix declined 5 percent to $154.48, while the Roundhill Memory ETF fell 7 percent to $53.62. Samsung shares dropped 9 percent in Seoul after its 2026 shareholder-return plan disappointed investors, and Nvidia slipped 3 percent as the Philadelphia Semiconductor Index declined 4 percent.

The selloff lands on a sector that has run enormously — Micron is up 239 percent year to date and SanDisk 572 percent — leaving the memory complex exposed to any China-related headline. Apple, Micron's largest customer for the high-density lpDDR5x DRAM used in iPhones and Macs, said it is "evaluating all options" on memory supply, with Xi's visit expected on or around September 24.

Why the China threat may be overstated

Rajkumar's channel checks found CXMT qualified for only one low-volume Mac product and not for iPhones, with poor yields on the high-density lpDDR5x DRAM Apple requires. YMTC has not qualified its NAND for any Apple product, allocating its latest-generation chips to domestic customers including Android smartphones, electric vehicles and Lenovo notebooks. Both companies remain on the Pentagon's Section 1260H list of firms with alleged ties to China's military-industrial base, which could complicate any procurement arrangement.

The reports also conflict with recent comments from Commerce Secretary Howard Lutnick, who told the Wall Street Journal last week that "the Trump administration is not in favor of that" when asked about Apple using Chinese memory. Micron has lobbied Washington against the arrangement, arguing it would undermine US semiconductor manufacturing.

Samsung and Nvidia add to sector pressure

Samsung's 9 percent drop followed its announcement that it expects to return between 90 trillion and 110 trillion Korean won to shareholders in 2026. JPMorgan analysts viewed the lack of an immediate buyback and unchanged return framework as disappointments after expectations had risen. The move does not alter the demand outlook for Micron's high-bandwidth memory or SanDisk's NAND, but it gave investors a reason to take profits.

Memory stocks were also caught in a broader semiconductor retreat ahead of Nvidia's earnings this week, with the Philadelphia Semiconductor Index down 4 percent. Investors appear to be trimming exposure before one of the most closely watched reports of the quarter.

For investors, the question is whether the selloff is a buying opportunity or the start of a correction. Micron trades at a premium after its 239 percent run, and any official readout from Washington or Beijing as the September summit window approaches could drive the next move. Rajkumar's view that the China threat is overstated suggests the drop may be overdone, but the sector's concentration in a handful of names leaves little room for error if policy shifts.

This article is for informational purposes only and does not constitute investment advice.