Apple is testing memory chips made by Chinas CXMT for use in flagship devices including iPhones and MacBooks. According to a report by the Wall Street Journal, the tech giant initiated preliminary talks to secure components for hardware sold within the Chinese market to combat rising prices. However, regulatory hurdles in Washington and production limits mean a final supply deal remains far from guaranteed.
The global surge in artificial intelligence development has triggered a major supply squeeze on memory components. PC makers HP and Acer have already started installing standard CXMT chips in laptops sold outside the United States to keep production lines moving. Apple is experiencing similar pressure, recently raising global hardware prices due to escalating component costs. Seeking a deal with CXMT represents an attempt to secure an alternative supply line and gain negotiation power against existing partners.
Any potential partnership must comply with tight export rules enforced by the United States government. The Pentagon has placed CXMT on a list of companies with suspected military ties, which worries policymakers concerned about national security. Federal regulations prohibit Apple from sharing proprietary specifications or engaging in custom hardware engineering with the Chinese firm. Consequently, Apple is seeking explicit approval from the White House before moving forward with any purchase of standard, off the shelf memory.
Even if Washington clears the deal, CXMT cannot resolve all of Apples supply issues immediately. The Chinese manufacturer has already maxed out its manufacturing capacity for the current year. Getting larger allocations will take time. Currently, CXMT is the fastest growing supplier of DRAM in the world, with Q2 revenue multiplying by more than 8 times compared to the previous year. Still, because of limited supply and high domestic production costs, their memory prices remain equal to or higher than equivalent products from Samsung, SK Hynix, and Micron.
