Apple has quietly been testing a new memory supplier for some of its devices sold in China, and the name behind those chips is one that Washington has been keeping a close eye on.
It’s the one that I talked about a few days ago in another story, when rumors about Apple considering a Chinese memory supplier started surfacing after the company announced an ugly price hike for most of its devices (except iPhone and Apple Watch).
So who is CXMT, and why is Apple testing its chips?
ChangXin Memory Technologies, or CXMT, based in Hefei, China, is the world’s fourth-largest producer of DRAM (after Samsung, SK Hynix, and Micron), the type used in smartphones, laptops, and servers.
According to a new report from Financial Times (FT), Apple has already begun testing CXMT’s chips for devices sold in China. It’s part of a broader lobbying effort by US tech companies to secure US government approval for the broader use of CXMT’s products.
However, it might not be as easy to get a nod, especially since CXMT sits on the Pentagon’s Chinese Military Company list, which poses reputational and political risks for Apple.
Apple ran into exactly that kind of criticism in 2022, when it explored a similar arrangement with YMTC, another Chinese chipmaker.
Will any of this actually lower your device prices?
I don’t believe it will. Analysts at SemiAnalysis say virtually all of CXMT’s output is already committed. Furthermore, the company is expected to remain supply-constrained for at least two years, even as it opens new production lines in Hefei, Shanghai, and Beijing.
CXMT currently holds about 11% of global DRAM wafer capacity, a figure analysts expect to grow to 15% in the next two years.
To me, it looks like Apple’s CXMT experiment is a supply chain strategy for the local inventory sold in China, rather than something that could benefit products sold globally.
For now, the report doesn’t mention anything about the US government pushing the decision back, but it has done so several times in the past, just something to keep in mind.
