Trump Administration Blocks U.S. Firms from Procuring Chinese Memory, Micron Stock Surpasses $1,000

Micron Technology (MU-US) stock reclaimed the $1,000 threshold on Monday (17th), buoyed by renewed capital inflows into artificial intelligence (AI) hardware stocks and U.S. government opposition to domestic firms procuring memory chips from China, providing policy tailwinds for Micron.

Micron opened higher and continued to climb on Monday, reaching an intraday high of $1,036.13. The stock closed up 4.13% at $1,011.75 per share, successfully surpassing the $1,000 mark and lifting its market capitalization to approximately $1.15 trillion. South Korean rival SK Hynix's ADR rose 4.5% during the same period, highlighting memory stocks as the leading segment in the current AI hardware rally.

Micron's stock has surged nearly 700% over the past year, more than doubling in value year-to-date, as AI servers continue to drive demand for high-bandwidth and other memory products.

Despite reclaiming the $1,000 level, Micron remains below its summer peak above $1,200, indicating that the recent move represents a rebound following a significant correction.

U.S. Secretary of Commerce Lutnick confirmed in an interview with The Wall Street Journal that the Trump administration is discouraging American companies from using memory produced by Chinese suppliers, stating that it is not an ideal practice for U.S. firms to rely on Chinese memory.

The administration has also communicated this stance to Apple (AAPL-US), according to the report. The Wall Street Journal previously reported that Apple had held preliminary discussions with Chinese memory manufacturer ChangXin Memory Technologies (CXMT) regarding component supply for certain devices sold in China.

Markets believe that if U.S. tech firms reduce procurement from Chinese memory suppliers, non-Chinese vendors like Micron could benefit, further solidifying their positions in the global memory market.

ChangXin Memory Technologies, which recently listed in China, has rapidly expanded in the traditional DRAM market. According to Counterpoint Research, CXMT held a 7% share of the global DRAM market by revenue in Q2 2024.

However, due to U.S. regulatory restrictions, American companies must obtain prior approval before sharing product information with CXMT, creating additional regulatory hurdles for collaboration.

Jefferies equity sales expert William Beavington noted that Micron and several U.S. senators are urging Apple to avoid partnering with Chinese memory suppliers. Nevertheless, amid tight global memory supply, Apple has stated it must evaluate all sourcing options.

This controversy highlights the growing tension between the supply chain realities faced by tech companies and the U.S. government's policy goals of reshoring semiconductor manufacturing and reducing reliance on China.