Apple is reportedly testing memory chips from Chinese memory semiconductor company Changxin Memory Technologies (CXMT) across several product lines, including iPhone and MacBook. With the artificial intelligence (AI) boom causing ongoing memory shortages and price increases, it is considering using Chinese-made memory to ease supply chain pressure. In particular, as CXMT rapidly expands production capacity and raises its share in the global DRAM market, it is growing its presence in the global memory market long led by Samsung Electronics(005930)·SK hynix(000660)·Micron.
On the 9th, the Wall Street Journal (WSJ) reported, citing multiple sources familiar with the matter, that Apple is testing CXMT memory chips across several product lines, including iPhone and MacBook. Apple also held initial talks on using CXMT parts in some devices sold in China, according to reports.
Apple has recently been raising product prices worldwide, citing expense increases stemming from surging memory demand by AI corporations. In this situation, if Apple secures an additional Chinese memory source through CXMT, it appears it could partially ease the memory supply-and-demand strain triggered by the AI boom.
However, there are several constraints before actual supply. U.S. federal regulations prohibit U.S. corporations from providing CXMT with technology or specific product specifications. This effectively limits the technical consultations needed when Apple orders custom memory chips tailored to its product performance. Kevin Wolf, an attorney at export-control law firm Akin Gump, said that under U.S. rules Apple can purchase CXMT off-the-shelf memory or negotiate prices, but custom chip orders are effectively difficult.
The U.S. government's stance is also a variable. The WSJ said Apple is hoping for White House consent to avoid political blowback in the United States from a transaction with CXMT. The Ministry of National Defense includes CXMT on a list of corporations linked to the Chinese military. Some U.S. policy officials worry that if CXMT receives orders from U.S. corporations, it could acquire U.S. technological know-how and additional funding, enhance its capabilities, and threaten the competitiveness of U.S. memory maker Micron.
Beyond regulatory and political burdens, supply conditions are also a variable. Many CXMT products are reportedly transacting at prices similar to those of Micron, Samsung Electronics, and SK hynix, while some products are being sold at even higher prices. This appears to reflect CXMT's tight supply and higher production costs than overseas competitors.
Production capacity is also cited as a constraint on securing large new overseas customers immediately. CXMT is said to be operating near full capacity this year, leaving limited room to supply additional memory chip volumes to new overseas customers.
Even so, CXMT's growth is steep. According to market research firm Counterpoint Research, CXMT's second-quarter revenue this year increased more than eightfold from a year earlier. Its revenue-based share in the global DRAM market has risen to 7%. Neil Shah at Counterpoint Research assessed the question of whether CXMT will join the so-called "memory big three" of Samsung Electronics, SK hynix, and Micron as "a matter not of how, but when."
Currently, CXMT is prioritizing memory supply to Chinese tech corporations such as ByteDance, Tencent, and Xiaomi. In particular, it is pushing to build new plants with the goal of more than doubling current capacity by 2028.
Still, it is not decided whether Apple will actually adopt CXMT as a supplier. Even so, Apple's test suggests that Chinese companies could further expand their footing in the global memory market centered on Samsung Electronics, SK hynix, and Micron.