Apple Testing Chinese Memory Chips in iPhones and MacBooks

Apple is currently evaluating memory chips from China's ChangXin Memory Technologies (CXMT) for use in its iPhones and MacBooks, according to a recent report by The Wall Street Journal. Laptop manufacturers HP and Acer have already incorporated CXMT's memory chips into their devices sold outside the United States. Apple has held preliminary discussions with CXMT regarding supplying components for devices sold within China and is awaiting approval from the White House before proceeding further.

The Financial Times had previously reported that Apple had started qualifying CXMT's dynamic random-access memory (DRAM), but this report is the first to specify the testing in particular product categories.

One potential hurdle to a deal with CXMT is U.S. regulations that prohibit American companies from transferring technology to Chinese firms, including conversations about technical specifications and product details. Apple can purchase CXMT's off-the-shelf components and negotiate prices, but cannot design custom chips to work specifically with its hardware, which may result in suboptimal performance.

Apple typically configures its memory to perform optimally with its own silicon, so using standard components could necessitate reworking certain hardware sections or accepting reduced performance.

Moreover, a bipartisan group of senators, led by Chuck Schumer, has called on Apple to avoid using Chinese memory altogether, with a response due on August 21. CXMT has reportedly reached its production capacity for the year and has limited capacity for new international customers, having already prioritized domestic clients such as ByteDance, Tencent, and Xiaomi.

Additionally, CXMT's prices are comparable to, or even higher than, those of Micron, SK Hynix, and Samsung. For Apple, this is problematic, as having an additional supplier is only beneficial if the firm can provide sufficient chips at competitive prices. However, CXMT currently falls short in both areas.

In June, Apple increased prices across its product line, excluding iPhone models, attributing the cost increase to memory expenses driven by the demand for artificial intelligence infrastructure.