Apple pursues CXMT partnership as AI boom triggers global memory supply shortage through 2027

Apple's Reported Push To Buy Chinese Memory Chips Isn't About Lower Prices, It's About Surviving A Worsen

AI Data Centers Are Reshaping The Global Memory Market In a post on Sunday, Kuo said the "memory supply-demand gap will keep widening through 2027," arguing that this is the real reason Apple is lobbying the Donald Trump administration to keep ChangXin Memory Technologies (CXMT) off the U.S. Entity List. According to Kuo, the pressure on Apple has shifted "from soaring memory costs to a widening supply gap." He estimates that 15% to 20% of memory capacity currently allocated to consumer electronics in 2026 could be redirected to AI data centers in 2027, with that share likely to increase further. As a result, Apple could receive 10% to 20% fewer A20 chips than originally planned during the second half of 2026 through the first quarter of 2027 because of tight LPDDR memory supply, though Kuo noted some of the shortfall could also reflect Apple overbooking orders. Why Apple Wants CXMT Despite Limited Capacity Kuo argued that adding CXMT would not significantly lower Apple's memory costs because the Chinese chipmaker's own IPO filing indicates its production capacity remains well below domestic demand. "Even if Apple's lobbying succeeds and it buys DRAM from CXMT, that would not materially lower costs or fill the supply gap," Kuo wrote. Instead, he said Apple is seeking "an additional source" as the global memory imbalance worsens. He contrasted the current situation with Apple's reported evaluation of Yangtze Memory Technologies in 2022, saying that the effort was primarily aimed at reducing NAND costs, whereas the CXMT push is about managing DRAM supply risk. Apple Seeks Supply Security As Memory Crunch Deepens Kuo's comments followed a Financial Times report that Apple is lobbying U.S. officials for assurances that CXMT will not be added to the Commerce Department's Entity List, which would impose stricter export restrictions. While CXMT remains on the Pentagon's 1260H list, Apple is reportedly seeking greater certainty as an industrywide memory shortage, fueled by AI demand, drives higher component costs, production constraints and longer delivery times. Why Apple's CXMT Push May Not Hurt Micron He also stated that Micron's growth is increasingly tied to high-bandwidth memory (HBM) for AI rather than commodity DRAM. Melvin said investors are focusing on the wrong part of the memory market, arguing CXMT mainly competes in commodity memory products such as DDR4, DDR5 and LPDDR chips used in consumer devices, while remaining at least one generation behind in HBM technology. He said Apple's reported efforts are aimed at lowering memory procurement costs, whereas Micron is focused on higher-value AI memory products, where tight supply continues to support pricing. Price Action: Apple shares rose 3.14% to close at $283.78 on Friday before slipping 0.45% to $282.50 in after-hours trading, according to Benzinga Pro. Benzinga Edge Stock Rankings place Apple in the 98th percentile for Quality, reflecting strong long-term fundamentals despite weaker performance over shorter time frames. Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

CXMT Can Witness Explosive Growth By Becoming Apple's DRAM Supplier For Several Years As Just A Single Deal Represents A Promising Future For The Chinese Firm

Samsung, SK hynix, and Micron can continue to rake in the profits during the AI boom, but CXMT is slowly gaining traction and has been under the eye of the industry, particularly as Apple is reportedly attempting to ink a deal with the Chinese memory manufacturer by attempting to get its name crossed off the U.S. Entity List. A potential deal between the Cupertino firm and CXMT could materialize, and it'll be a period of prosperity for the latter, as a new report states that a single deal has brought in $3 billion. Tencent and CXMT have inked a multi-billion-dollar deal, showing the heights the manufacturer can reach if a partnership with Apple forms The Chinese DRAM maker has witnessed a mammoth 700 percent year-over-year increase in revenue for the Q1 2026 quarter, generating 50.8 billion ($7.45 billion) while pocketing 25 billion yuan in profit ($3.67 billion). This is an exceptional showing from the manufacturer, which just a year ago recorded a loss of 1.6 billion yuan, or $234.6 million. According to Reuters, CXMT has just formed a $3 billion deal with Tencent for three years, with another source claiming that the partnership will remain intact for five years. The details mention that Tencent will source the memory chips for servers to power cloud computing, databases, and AI workloads. To ensure that CXMT enjoys a stable revenue stream, it has formed a Long-Term Agreement (LTA), though it's unconfirmed if the manufacturer will also supply Tencent with High-Bandwidth Memory (HBM), a primary component for AI chips. Seeing as how CXMT has generated $3 billion in earnings from a single deal, imagine the heights the company could reach if Apple brings it on board as a supplier? With the iPhone maker paying $145 for a single 12GB LPDDR5X module, Apple has pretty much accepted that paying a premium for these parts will be the norm for several years. Its motivation of bringing CXMT into the fold has more to do with minimizing DRAM shortage risk rather than lower prices and boosting supply, at least according to TF International Securities analyst Ming-Chi Kuo. CXMT can also use this crisis as an opportunity to etch its name as a reliable Apple DRAM supplier, securing a similar LTA that it made with Tencent. However, we shouldn't be surprised if priority is still given to AI companies due to the sheer volume of orders. However, with the amount of iPhone 18 shipments expected to be recorded later this year, CXMT will surely miss out if it doesn't seize this opportunity, but that'll only matter if Tim Cook can convince the U.S. administration to get the ball rolling. News Source: Reuters Follow Wccftech on Google to get more of our news coverage in your feeds.