Apple’s bid to use Chinese memory maker CXMT as a negotiating weapon against Samsung Electronics and SK Hynix has produced the opposite result as the two Korean chipmakers now face less pressure to cut prices, not more, according to a DigiTimes report published today. The strategy was designed to create leverage; instead, it reported that use does not exist.
Facing a 55% to 60% surge in standard DRAM contract prices, driven by AI server demand pulling capacity away from consumer devices, Apple began exploring CXMT and fellow Chinese chipmaker YMTC as potential alternative suppliers and progressed to actively testing CXMT chips. The intent was to signal to Samsung and SK Hynix that a credible cheaper alternative existed, a tactic Apple has deployed before with OLED suppliers and contract manufacturers.
Without a genuine, cost-competitive Chinese supplier to point to, Samsung and SK Hynix have no particular incentive to soften their pricing, especially while both are shifting production capacity toward high-bandwidth memory for AI servers and tightening the broader DRAM supply in the process. CXMT’s structural limitations are a large part of why the threat was never credible: barred from EUV lithography tools under U.S. Export controls, the company relies on older DUV equipment that requires roughly 30% more wafer starts to produce equivalent output, which makes it hard to undercut competitors on cost at scale. CXMT is now the world’s fourth-largest DRAM producer with around 11% of global wafer capacity, a share expected to reach 15% by 2028, but size alone does not resolve the efficiency gap.
The supply chain problem has a political dimension that has grown considerably more complicated since Apple’s earlier YMTC negotiations in 2022. Senator Chuck Schumer, alongside several Senate colleagues, has written to Apple demanding it commit to not purchasing chips from either CXMT or YMTC in any product sold anywhere in the world, with a response deadline of August 21. Both companies appear on the Defense Department’s list of firms suspected to have ties to the People’s Liberation Army.
Marco Rubio, serving as Trump’s National Security Advisor, previously accused Apple of “playing with fire” during the 2022 YMTC episode. The political coalition against Apple’s current plan is broader than it was then, partly because more memory suppliers are now lobbying actively against it. Micron Technology has been pressing the administration to block Apple’s request, arguing that approving Chinese suppliers into Apple’s supply chain would undermine domestic memory investment. With Micron’s U.S. Manufacturing expansion explicitly on the line, the administration now has domestic stakeholders on the other side of Apple’s supply-chain argument in a way it did not in 2022.
Analyst Ming-Chi Kuo has framed the CXMT situation as a symptom of something more fundamental. Apple recognizes it is facing a prolonged global memory supply shortage that it expects to persist well into 2027. The tightening LPDDR supply has real production consequences, with Apple’s pull-in volume of A20 chips for the second half of 2026 through the first quarter of 2027 potentially running 10% to 20% below original targets, a shortfall that Samsung Display and other incumbent suppliers are not positioned to absorb quickly either.
Apple was not merely trying to shave a few dollars off DRAM contracts; it was trying to secure volume that may not exist in sufficient quantity from its existing suppliers regardless of price. The gambit failed on the use front, the political front is now a genuine liability ahead of the August 21 deadline, and the underlying supply problem remains unsolved.
