HKEJ Breaking News - International Finance - Chips | Apple reportedly starts testing ChangXin Memory's DRAM, or purely a bargaining chip - HKEJ website hkej.com

Global memory chip shortage: Apple has reportedly been actively lobbying relevant U.S. regulatory agencies in hopes of purchasing chips from two Chinese semiconductor manufacturers blacklisted by the U.S. Department of Defense — ChangXin Memory Technologies (CXMT) and Yangtze Memory Technologies (YMTC). The Financial Times recently quoted sources as saying that Apple has started testing CXMT's DRAM (dynamic random access memory) and plans to use it in devices sold in China.

Sources revealed that Apple is also leading lobbying efforts among U.S. tech companies to persuade U.S. officials to allow broader use of CXMT's products.

However, a recent report from Bank of America pointed out that the likelihood of Apple substantially adopting CXMT's DRAM is low.

Three major factors hinder substantial large-scale adoption

The bank listed three core factors. First, geopolitical policy constraints. CXMT is on the U.S. Department of Defense blacklist, triggering sensitive supply chain reviews. The current U.S. semiconductor export control policies toward China create a hard threshold; for Apple to use CXMT products on a large scale, it must first pass Washington's compliance hurdles.

Second, the technology specification gap. Apple devices have clear standards for LPDDR5X memory, requiring a transfer rate above 10 Gbps, a 1.1V operating voltage, and ECC error correction functionality. Although CXMT's existing chips can achieve a maximum rate of 10.667 Gbps, they are constrained by relatively outdated manufacturing processes, resulting in higher parasitic capacitance and leakage current.

Third, the risk of patent litigation. The global DRAM core patent pool has long been monopolized by Samsung, SK Hynix, and Micron. If Apple adopts CXMT chips on a large scale, it could easily become embroiled in patent infringement disputes, increasing supply chain legal costs and uncertainty.

Expected to be limited to entry-level low-end models

Considering the above obstacles, Bank of America believes that even if Apple uses CXMT DRAM, it will initially be limited to entry-level low-end models such as the iPhone 18e. Meanwhile, domestic consumers prefer high-end iPhones, and sales of low-end models are weak. The corresponding memory procurement orders are limited in volume, making it difficult to achieve a procurement scale with industrial significance.

The report also mentioned that Apple's deployment of CXMT memory has a clear business strategic intent: it hopes to include a Chinese DRAM supplier on its potential qualified list as a bargaining chip. This would give Apple stronger pricing leverage when negotiating supply contracts with the three major memory manufacturers — Samsung, SK Hynix, and Micron — for the second half of this year and next year, thereby lowering chip procurement prices. This is especially advantageous when AI is squeezing consumer-grade memory capacity and contract prices are rising; having a backup option provides a negotiation advantage.