Apple, known for its strict adherence to American standards and technological sovereignty, is forced to take an unprecedented step. Amid a global crisis in the semiconductor industry, the company has begun testing dynamic random-access memory (DRAM) chips produced by the Chinese firm ChangXin Memory Technologies (CXMT). This decision is a response to the unprecedented rise in component costs and their acute shortage in the global market.
Economic necessity and memory shortage
Apple's strategy to diversify suppliers is dictated by harsh economic reality. Despite already collaborating with the three largest global memory manufacturers — Samsung, SK Hynix, and Micron — this proved insufficient to keep prices stable. In the past, Apple was already forced to raise prices on its flagship iPad and Mac lines precisely due to the rapid increase in component costs.
The key factor exacerbating the situation was the boom in artificial intelligence technologies. Major industry players redirected their production capacity to serve data centers, leading to a sharp decline in the supply of consumer DRAM memory. Under these conditions, Apple is seeking ways to maintain profitability and product availability.
Compromise: Chinese chips only for the Chinese market
To avoid violating US legislation while simultaneously protecting its revenues, Apple has proposed an elegant but risky solution. The company plans to use chips from CXMT exclusively in devices that are manufactured and sold within China itself.
Such geographical segmentation will free up memory volumes from American Micron or South Korean Samsung for devices supplied to the US and European markets. Legally, this solution is permissible: CXMT's inclusion in the Pentagon's 1260H list formally does not prohibit commercial transactions, but rather restricts the company's right to participate in US government procurement.
Political risk and negotiations with Washington
Despite legal loopholes, Apple is aware of the risks. The company is seeking guarantees from the US administration (in the context of future political shifts, including a possible return of Donald Trump) that CXMT will not be moved to the stricter Entity List of the Department of Commerce. Inclusion in this list would mean a complete blockade of supplies and the collapse of the strategy.
Currently, Apple CEO Tim Cook is holding active negotiations with US administration officials. His task is to mitigate political consequences and find a balance between US national security concerns and the corporation's economic benefit.
Who is ChangXin Memory Technologies?
ChangXin Memory Technologies has long remained an obscure local player that has suffered billions in losses over the last decade, operating primarily on Chinese state subsidies. Currently, it has at least 15 state shareholders.
However, the current global semiconductor crisis has propelled CXMT to the forefront of Chinese import substitution. The company has become the fourth-largest DRAM manufacturer in the world, capturing about 11% of the market. CXMT plans a massive IPO to raise $4.3 billion for further factory expansion.
Criticism from Congress
Apple's plans to engage a state-owned Chinese manufacturer have already sparked sharp discontent among US lawmakers. Members of Congress, in particular the chairman of the China Committee, John Moolenaar, have called the potential partnership a "serious mistake".
Critics argue that this decision will financially strengthen a Beijing-controlled competitor and deepen the American tech giant's dependence on China's supply chains, which contradicts the course of technological isolation of China.
