Apple is reportedly testing memory chips from ChangXin Memory Technologies (CXMT), which the US government recently added to the Pentagon’s list of Chinese military-linked companies. A new report citing people familiar with the matter has claimed that the Cupertino-based tech giant is evaluating CXMT memory across products including iPhones and MacBooks as it faces a global memory shortage driven by demand from artificial intelligence companies.According to a Wall Street Journal report, Apple has also held early discussions with CXMT about potentially supplying memory components for some devices sold in China. The company is reportedly seeking approval from the Trump administration to work with the Chinese chipmaker, as rising memory costs have driven up consumer electronics prices.
Why Apple is testing CXMT memory chips
Apple is looking for additional memory supplies as demand from AI companies puts pressure on the global market. The company has been raising prices on some products, citing higher memory costs, while computer and smartphone shipments have also been affected by the supply situation.CXMT could provide Apple with another source of memory, although the Chinese company currently has limited production capacity. People familiar with the matter said CXMT has already reached its production limit for this year, leaving little room for new international customers.Apple typically works with suppliers to customise components for its devices. However, US export-control rules restrict American companies from transferring technology to CXMT, including technical details and product specifications required for developing customised memory chips.According to export-control lawyer Kevin Wolf, US rules allow American companies to use off-the-shelf CXMT components and negotiate prices with the Chinese company. However, using standard memory could require Apple to redesign some parts of its products.CXMT’s technology also continues to trail that of established memory suppliers in some areas, partly because restrictions have limited its access to advanced chipmaking equipment.
Why CXMT is facing US government scrutiny
Apple’s reported discussions with CXMT follow the US government’s June placement of the Chinese company on the Pentagon’s list of Chinese military-linked companies. The designation identifies companies that the US says are directly or indirectly owned, controlled by or acting on behalf of Chinese government entities, or contributing to China’s military-civil fusion strategy.The company has not been placed on a US blacklist, meaning the Pentagon designation does not, by itself, create a blanket ban on American companies purchasing CXMT’s commercially available memory chips.However, CXMT is facing additional scrutiny in Washington following its stock market debut. According to a New York Post report, at least half a dozen members of Congress are expected to seek a formal national security investigation into whether Beijing played a role in the company’s initial public offering.A senior US government source cited by the publication described CXMT as being deeply embedded in “the Chinese industrial military complex” and called its expansion “a ticking time bomb for national security.”“CXMT just got a massive cash infusion that will send shivers down the spines of the US intelligence community,” the source said.US officials cited in the report have raised concerns that Chinese memory chips used in consumer electronics could eventually enter American military supply chains. They have also warned that increased business with CXMT could provide the company with additional funding and access to US technology.