Apple has been testing memory chips from China's CXMT across product lines including iPhones and MacBooks, according to people familiar with the matter, as the U.S. company addresses a memory crunch during the artificial-intelligence boom.
Apple has held early talks with CXMT about supplying components with the goal of using them in some devices sold in China, the people said. Apple hopes to win the White House's blessing to do business with the Chinese company.
Apple is raising prices on its products globally, blaming the rising cost of memory chips because of high demand from AI companies. Getting access to Chinese supplies could help the iPhone maker ease its crunch.
Laptop makers HP and Acer have started using memory chips from CXMT in devices sold outside the U.S. to alleviate some of the memory supply strain, people familiar with the matter said. The Chinese company recently listed its shares in Shanghai and is the most valuable company listed in mainland China with a market capitalization equivalent to $520 billion as of Friday.
Federal rules prevent U.S. companies from transferring technology to CXMT, including any communication about technical details and product specifications, a routine part of creating the specialized chips that Apple typically uses. The restriction effectively stops Apple from ordering custom chips from CXMT. The rules permit Apple to use off-the-shelf CXMT components and to negotiate prices with the Chinese company, according to Kevin Wolf, a lawyer at Akin Gump who advises companies on export controls.
Even if Apple is strictly adhering to U.S. regulations, it might still want cover for using Chinese memory chips from the Trump administration to avoid political blowback.
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Some U.S. policymakers fear that if CXMT gets orders from leading American companies, the memory-chip maker would gain access to American know-how and more funds to advance its technology. They say that could help Beijing's military and undercut U.S.-based Micron Technology, which is building new factories in Idaho and upstate New York. The U.S. has put CXMT on a list of entities that the Pentagon says have links to China's military.
Apple often tailors components to its devices to maximize performance. Using standard CXMT memory chips could force Apple to redesign certain parts of its products. Industry analysts also say CXMT's technology still trails its foreign competitors, in part because the company's access to the most sophisticated chip-making equipment is restricted.
At present, CXMT wouldn't be a panacea for Apple. The Chinese company has maxed out its production capacity this year, leaving little room for new international clients, the people familiar with the matter said.
HP and Acer have secured limited quantities of memory chips and are seeking to lock in more supplies for next year, some of the people said. Nikkei Asia earlier reported on the moves by HP and Acer.
Many CXMT products are fetching prices on par with -- and occasionally at a premium to -- those of Micron and South Korea's SK Hynix and Samsung Electronics, the people said. The pricing strategy was partly driven by CXMT's tight supply and higher production costs compared with foreign competitors, they said.
Rising memory costs have begun suppressing shipments of computers and smartphones. Global personal-computer shipments fell 4% in the second quarter from a year earlier while smartphone shipments dropped 11%, according to Counterpoint Research.
CXMT has been the world's fastest-growing supplier of the mainstay memory chips known as DRAM. Its revenue in the second quarter of this year was more than eight times the level of a year ago, thanks to strong demand, expanding production capacity and price increases. CXMT took 7% of global market share by revenue, Counterpoint data showed.
CXMT is giving priority to domestic technology companies including ByteDance, Tencent and Xiaomi, all of which are boosting their AI offerings. CXMT is building new plants, aiming to more than double its current production capacity by 2028.
"The question is not about 'how' but 'when' CXMT will be able to break into the Big Three Memory Club," Counterpoint researcher Neil Shah wrote in a report, referring to SK Hynix, Samsung and Micron.
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