From chip engineers to iPhone users, Koreans side with Micron after Tim Cook's memory remarks

The global tech world is now divided into two hostile camps: Apple and Micron. And while Samsung Electronics and SK hynix remain officially mum on the clash, their employees clearly sympathize with their fellow chipmaker.

Apple CEO Tim Cook threw the Big Tech brouhaha’s first punch in a Wall Street Journal interview two weeks ago, blaming skyrocketing consumer electronics prices on chipmakers and accusing them of “passing along huge price increases.”

Micron CEO Sanjay Mehrotra counterattacked, telling CNBC on June 30 that “certain customers drove pricing significantly down in our industry.”

Though he did not directly name Apple, he appeared to be alluding to  Apple's long-standing strategy of aggressively squeezing component prices, especially during cyclical downturns for memory chipmakers, by leveraging its scale and multi-vendor sourcing.

Employees at Korea’s two chip giants haven’t been shy about expressing their scorn for Apple.

“Sure, dynamic random access memory prices have gone up a lot, but Apple's price hikes are several times larger than the increase,” a memory chip engineer at Samsung Electronics said. “They used to force memory makers to slash prices whenever the market turned down. Now that every Big Tech company is scrambling for memory, Apple doesn't have the same leverage.”

A chip engineer at SK hynix said Apple's greed for higher profit margins, compared to other smartphone makers, was a key driver behind the steep price hikes.

"Apple has plenty of room to keep prices down if it is willing to sacrifice some of its margins. But they can’t stand that,” they said. “Their playbook has always been the same. They ask you to make 100 units at $10 each, and once you have made them, they will likely say, 'We'll pay you $5.’ Then they turn around and sell the finished product for $100 or $200.”

To prevent such cases, the Korean chipmakers vowed to impose stricter terms and conditions in long-term contracts, according to executives at Samsung and SK hynix during first-quarter conference calls.  

The Korean general public is also weighing in on the dispute in online forums and media comment sections. Given the importance of Samsung and SK hynix to the Korean economy, all things chip-related have an outsized impact on the country.

Even in Asamo, the country’s largest iPhone user community with 2.4 million members, Cook's remarks have been pilloried. In particular, one post accused Apple of moving to source memory chips from Chinese producers after taking advantage of Korean chipmakers.

Bloomberg reported that Apple is in discussions with China’s CXMT and YMTC to supply memory chips, although the supply is intended for devices sold in China.

Still, other members have stayed loyal to the smartphone maker, sharing locations for buying iPhones at lower prices in the wake of the price increase.

BY PARK EUN-JEE, SARAH CHEA [[email protected]]