Apple Testing Chinese DRAM Chips Amid Geopolitical Tensions
Quick Look
- Apple is testing DRAM chips from China's CXMT for domestic use and lobbying the US government for wider approval.
- This move occurs amid US efforts to curb China's tech ambitions, with CXMT poised to be key in China's AI supply chain and planning a significant IPO.
AI-generated summary
Why It Matters
Apple is testing DRAM chips from China's CXMT for devices sold in China and is lobbying the US government to allow broader use of these chips. This occurs as US-China tech competition intensifies.
Apple has begun testing DRAM chips from China's state-backed ChangXin Memory Technologies for devices sold within China and is lobbying the U.S government to permit broader use of CXMT's products, the Financial Times reported on Wednesday, citing people familiar with the matter.
The company's decision comes as its involvement with Chinese suppliers becomes a sensitive geopolitical issue amid growing U.S. efforts to contain China's tech ambitions.
CXMT is poised to become central to Beijing's efforts to build a self-sufficient AI supply chain and is expected to become one of the most profitable technology companies to list in Shanghai, the FT said. It reportedly plans to raise at least 29.5 billion yuan ($4.3 billion) in an upcoming IPO.
In 2022, Apple faced significant pushback from U.S. policymakers including then-Senator Marco Rubio, who is now Secretary of State, after exploring the use of Chinese memory suppliers, the FT reported. At least 15 state-owned shareholders collectively hold 36% of CXMT, the report said, adding that many of its private funds also have backing from state-owned limited partners.
CXMT is currently the world's fourth-largest producer of DRAM, a memory chip used in a wide variety of products ranging from smartphones to servers, the report said. Its market share is expected to rise to 15% by 2028 from roughly 11% last year, as new production lines come online in the Chinese cities of Hefei, Shanghai and Beijing, the report showed, citing data from SemiAnalysis.
Its main global peers in DRAM include Samsung Electronics, SK Hynix, and Micron Technology.
While CXMT's capacity is expanding, it is unlikely to immediately flood the market with cheap chips, as its output is largely pre-committed, Ray Wang, a memory analyst at SemiAnalysis, told the FT.
Nevertheless, the industry fears a long-term repeat of patterns seen in sectors like solar panels and electric vehicles, where state-backed capacity expansion ultimately led to falling global prices and squeezed foreign rivals, the report said.
Reuters previously reported that the U.S. has held off on adding CXMT, AI startup DeepSeek, and over 100 other companies to its trade blacklist, despite them being flagged as national security risks, as the Trump administration seeks to avoid escalating tensions with Beijing.
Apple and CXMT did not immediately respond to CNBC's requests for comment.
What to Watch
AI outlook — possibilities, not facts
CXMT's market share to rise to 15% by 2028.
Likely · Within years
Open Questions
- Will the US government permit broader use of CXMT chips?
- What is Apple's long-term strategy for Chinese suppliers?
- How will global DRAM prices be affected?
