Apple tests China's CXMT memory chips… controversy over using a company listed on the US Defense Department's sanctions list

The report says Apple wants to introduce Chinese-made memory chips into its own products, such as iPhones sold in China.

They are worried that Apple would be helping grow China's semiconductor industry.

Apple has begun testing chips from the Chinese memory maker CXMT (ChangXin Memory Technologies) for products sold in China, as memory shortages deepen. Apple has struggled to secure enough memory for its smartphones, laptops, iPads and other products, so the move appears aimed at stabilizing parts supply by diversifying suppliers. It is also read as a strategy to reduce cost pressure from soaring memory prices and to strengthen its negotiating leverage with existing suppliers.

As of the end of the first quarter, Samsung Electronics held the top global memory share at 38%, SK hynix had 29%, and US-based Micron had 22%, so these three together account for about 89–90% of the market. Following them, CXMT, which recently listed, is growing rapidly with a share of roughly 8%.

CXMT (ChangXin Memory) was founded in 2016 and has grown rapidly in about a decade. It is headquartered in Hefei, Anhui Province, and was established with funding from the city of Hefei. Since its early days, it has rapidly built technological capability and expanded market share with strong government support.

CXMT is drawing considerable attention in the DRAM market. In particular, as the AI era advances, supply bottlenecks in DRAM widely used in servers have intensified, highlighting CXMT's role further. Among China's DRAM makers, ChangXin is regarded as having the most advanced technology.

In its early stage, CXMT received investment of roughly 2–3 trillion won from a Hefei municipal fund, and later it also received investment from the People's Liberation Army. This means CXMT is effectively a company supported by the Chinese government. However, the PLA's exact stake has not been made public.

CXMT is on the US Department of Defense's sanctions list. It was designated as a company linked to the Chinese military or government under Section 1260H of the National Defense Authorization Act (NDAA). The Pentagon updates this list every year, and in its 2025 report it explicitly listed CXMT (ChangXin Memory) as a 'military-linked company.'

No explicit rule covers private companies, but according to the Wall Street Journal, trade-sanctions lawyers judged that even private firms that consult on technology, request customized services, or exchange information with a listed company could violate NDAA provisions. However, buying in bulk and using products that these companies sell as standard commercial goods is not subject to sanctions.

Apple is known for always ordering custom-made components, including memory, to make its devices smaller and reduce heat. So it is unlikely Apple could simply buy CXMT memory in bulk and use it as is. Designs optimized for small smartphones and laptops and heat control would require technical consultation with CXMT or modified parts, and general legal experts say this process would likely run afoul of the NDAA. The fact that Apple is testing CXMT chips also suggests that technical cooperation for optimization is likely involved, not just a simple purchase of general-purpose products. In the end, adopting CXMT memory would likely require a complicated strategy to avoid NDAA sanctions.

Micron CEO Sanjay Mehrotra strongly criticized the possibility that Apple would use CXMT memory. He publicly said, "If Apple buys memory from the Chinese company ChangXin, the US memory industry will be ruined just as the US steel and shipbuilding industries were," voicing dissatisfaction that a domestic company, Apple, would support a Chinese firm. Micron is considered one of the three major global memory makers alongside Samsung Electronics and SK hynix.

Micron has previously suffered from aggressive price-cutting by Apple. In particular, when the semiconductor industry entered a downturn three or four years ago, Apple pressured Micron, leaving Micron struggling with losses, as revealed through the Micron CEO's remarks. This shows Apple has used a strategy of maximizing its bargaining power by exploiting suppliers' difficult situations in the past.

Even though using CXMT could cause political and legal problems, Apple seems willing to take that risk to cut costs and secure parts stably. Apple's true intentions cannot be known precisely, but analysts say rising memory prices likely had a major influence on its decision.

The argument is that US consumers could indirectly benefit.

According to the Wall Street Journal's analysis, CXMT's DRAM prices are not expected to be much lower than those of Samsung or SK hynix. Apple's main aim in adopting CXMT chips appears to be securing ample supply and sending existing vendors a message that 'ChangXin is also an option,' thereby boosting its negotiating power. This is a classic strategy of splitting suppliers to induce competition and lower prices. Analysts therefore say CXMT is not going to supply memory more than 20% cheaper, but will mainly serve as a counterweight.

There is also a possibility that Apple could avoid US regulations. For example, it could strictly comply with rules in the US market while the White House or Treasury makes exceptions for Apple products sold on other continents. In that case, if it does not engage in deep customized technical cooperation and simply buys general-purpose products in bulk to assemble and sell, use of CXMT memory outside the US could be permitted.

This could mean installing CXMT memory in cheaper iPhone models with reduced camera specs or memory capacity. In that case, using Chinese-made memory only in entry-level models sold outside the US could be a way to cut costs while avoiding US government regulations.

Micron points to high land prices and labor costs in building fabs and running front-end processes in the US, and criticizes Korean companies for merely going through the motions of building plants in the US. It stresses that Micron is the only company running front-end processes domestically, and is raising its voice for US government support and protection of domestic firms.

Despite demands to build factories in the US, it continues to operate by outsourcing key components, and there is hardly any talk of it struggling with tariff issues. This is interpreted as the White House showing special consideration because Apple is the top US company by market value. It is likely judged that Apple's impact on the national economy is far greater than Micron's.

Apple is pressuring Micron, a domestic company, on prices by pointing to its high margins. Citing the chip boom that has pushed Micron's profit margin close to 80%, it criticized, "If you sell goods and make an 80% profit, what can we do?" Comparing this with Apple's average margin of about 32%, it argued that Micron is overpricing. Based on this logic, Apple is seeking to gain the upper hand in price negotiations with Micron and other existing suppliers.