CXMT rejects Apple’s bid for cheaper memory chips

Apple ↘ 0.80% has been testing memory chips from China's ChangXin Memory Technologies across product lines including iPhones and MacBooks, as a global DRAM shortage driven by surging AI demand threatens production of its upcoming iPhone 18 Pro lineup, according to a report from The Wall Street Journal News Corp ↘ 3.58% published Sunday.kelo+2

The company held early talks with CXMT, China's largest chipmaker by market value, about supplying components for devices sold in China, according to Reuters, citing people familiar with the matter. However, the discussions have hit multiple obstacles — from pricing disagreements to political headwinds in Washington.investing+1

CXMT Declines Apple's Discount Request

CXMT reportedly turned down Apple's push for prices below those charged by its existing suppliers Samsung, SK Hynix ↘ 3.12%, and Micron ↘ 2.22%. Industry sources indicated CXMT's proposed prices matched or even exceeded those of the Korean and American incumbents, with the Chinese firm under no pressure to offer discounts given that its 2026 production capacity is already fully committed to domestic customers including Tencent and ByteDance.phandroid+1

The shortage is already having tangible effects on Apple's supply chain. Tom's Hardware reported that approximately $1 billion worth of completed A20 Pro chips are sitting on shelves at TSMC Taiwan Semiconductor Manufacturing Company Limited ↘ 1.20% awaiting DRAM components before final packaging can proceed. Memory costs for the 256GB iPhone 18 Pro are projected to jump from roughly 10% to 34% of the total bill of materials year over year, according to TrendForce estimates.tomshardware+1

Political and Capacity Constraints

Apple's pursuit of CXMT memory also faces scrutiny in Washington. The Wall Street Journal reported in July that Apple CEO Tim Cook pitched the Trump administration on a plan to use CXMT and YMTC chips in products sold outside the U.S., while Micron lobbied to block the move. A group of senators, including Chuck Schumer, urged Apple to avoid CXMT, which appears on a Pentagon list of companies with alleged Chinese military ties.wsj+1

CXMT's limited production capacity further dims the prospect of a large-scale partnership. HP ↗ 0.37% and Acer have already secured limited volumes of CXMT memory for devices sold outside the United States.kelo+1

Consumers May Face Higher Prices

Analysts expect the memory crunch to push iPhone 18 Pro prices higher this fall, with some forecasts predicting increases of $200 to $300 for the Pro Max model. Apple has already raised prices on several Mac and iPad models to absorb rising component costs, and the iPhone may no longer be shielded from similar adjustments.techedt+1