Apple Inc. has been actively seeking authorization from the Trump administration, including the White House and Commerce Department, to acquire memory chips from ChangXin Memory Technologies (CXMT). CXMT, identified as China's largest memory chip producer, is on the Pentagon's blacklist as a Chinese military company. Although not yet on the Commerce Department's Entity List, Apple is lobbying to prevent its inclusion, which would effectively block any deals requiring US technology export licenses that are typically denied for such entities.
This move by Apple comes as the company faces significant increases in the prices of DRAM and NAND components, largely attributed to surging demand from artificial intelligence applications. These cost pressures have led Apple to raise prices on some of its products, including certain iPad and MacBook models. For instance, the MacBook Air saw a $200 price increase (from $1,099 to $1,299), and the MacBook Pro increased by $300-$400. Apple's stock fell 6.12% on June 25, erasing roughly $265 billion in market cap, following these price adjustments.
The memory shortage is severe, with prices for memory and storage quadrupling over three quarters, according to Counterpoint Research. Analysts do not expect significant relief before 2027-2028. Apple is reportedly negotiating to source DRAM from CXMT and NAND flash from Yangtze Memory Technologies Co. (YMTC), another blacklisted firm, specifically for devices sold within China. This strategy aims to expand Apple's supplier base from three to five, potentially offering some leverage against rising costs. However, these chips would not be used in products sold outside of China, meaning US consumers would not see price reductions. Apple CEO Tim Cook has stated the price increases are unavoidable due to the unprecedented surge in memory chip prices, which he described as unlike anything he's seen in over 40 years.
