The ongoing memory chip shortage has forced the tech industry to raise prices, and one major supplier is pointing the finger at Apple. After announcing a massive jump in revenue this week, a top executive at Micron suggested that the aggressive buying tactics used by the smartphone maker during the last market downturn are partly to blame for the current lack of supply.
The comments arrive just after the tech giant bumped up the cost of several devices to offset rising component expenses.
Micron says cheap deals stopped it from funding new factories
Micron Chief Business Officer Sumit Sadana explained to The Wall Street Journal that the supplier could not invest in new production capacity a few years ago. During the last big slump in the memory market, certain buyers pushed hard for rock-bottom prices. This move caused Micron to lose money and forced it to halt investments in 2023. While the executive did not mention the brand by name, the timing and context clearly point toward the creator of the iPhone.
The tech giant is well known for driving a hard bargain with suppliers to keep costs low. Those long-term contracts helped it delay price hikes longer than competitors. However, the supplier claims those same deals created a bad environment for the whole industry. Because the memory sector was not making enough money, it could not afford to build out the extra capacity needed to meet demand today.
The situation came to a head recently when the tech giant announced sweeping price increases across the Mac and iPad lineups, along with the Apple TV and Vision Pro. CEO Tim Cook called the current component crunch a hundred-year flood, noting that the memory sector was passing along huge cost increases. Cook said the company had to raise shelf prices because the situation was no longer sustainable.
This back and forth shows how deeply connected the supply chain really is. While squeezing suppliers for better deals helps profit margins in the short term, it can clearly backfire when demand spikes. With memory costs expected to stay high for the foreseeable future, everyday buyers will be the ones footing the bill for this ongoing standoff.
