Chinese CXMT rejects Apple, leaving the company scrambling for DRAM

Apple's attempt to squeeze a cheaper DRAM deal out of Chinese memory maker CXMT has reportedly fallen apart. This has added another wrinkle to the company's supply chain headaches ahead of its biggest launch window of the year.

According to a report from Korean outlet Digital Daily, along with Tim Culpan's Culpium newsletter, CXMT turned down Apple's request for discounted pricing on LPDDR5X memory. Apple was reportedly hoping to bring CXMT in as a third supplier alongside Samsung and SK hynix, using the extra option as leverage to keep prices down across its existing partners.

6

That plan doesn't seem to be working. CXMT is apparently quoting prices in line with, or even above, what Samsung and SK hynix already charge Apple. Its domestic customers, namely Huawei and Xiaomi, have reportedly booked much of its output well in advance, and CXMT doesn't seem to need Apple's business badly enough to cut a deal.

It's a rare position for Apple to be in. The company usually holds the upper hand in supplier negotiations thanks to the sheer size of its orders, but the current memory shortage has flipped that dynamic. With AI data centers hoovering up DRAM and HBM capacity, suppliers increasingly get to set the terms.

6

For Apple, the timing isn't great either. Apple has less than six weeks before its expected iPhone 18 and foldable iPhone Ultra launch, and assemblers are reportedly rushing DRAM orders to make sure supply is locked in. Micron remains Apple's primary LPDDR5X source, with Samsung and SK hynix filling in the rest, but there's apparently little room left for Apple to negotiate a better price anywhere in that chain right now.

CXMT itself has grown from a minor domestic player into one of the world's largest DRAM makers in just a few years, aided by state backing and fab construction timelines that reportedly run at roughly half the industry norm. That expansion hasn't translated into cheaper chips, though, at least not for Apple, and it doesn't look like that's changing anytime soon.

6

The average Apple buyer is the one likely to feel this. Memory costs are already baked into Apple's recent Mac and iPad price hikes, and if Apple can't find cheaper DRAM anywhere, including from a rapidly growing Chinese supplier, it's hard to see iPhone 18 pricing staying flat.

Frequently Asked Questions

TweakBot answers common questions about this news using TweakTown's own coverage from this page and related content from our archive. All answers are generated from TweakTown content and not outside sources. Tap a question to reveal the answer, or type your own below related to this content.

Question #1

How has CXMT’s growth affected global DRAM supply and pricing according to the article?

CXMT’s rapid growth has increased overall DRAM capacity but has not eased supply tightness or driven down prices for buyers like Apple. The article says CXMT has become one of the world’s largest DRAM makers and much of its output is prebooked by domestic customers and AI/data center demand, leaving suppliers able to set terms. As a result, expansion has not translated into cheaper chips for Apple and gives it little room to negotiate lower pricing.

Answered

Question #2

Could CXMT have supplied Apple despite being on the US blacklist, and what complications would that create?

Yes. The primary article says CXMT is on a US blacklist, meaning a deal would have “its own headaches,” and related coverage notes Apple was reportedly seeking US government approval to buy memory from CXMT. That implies supply was possible only with regulatory signoff, creating political and approval complications for Apple (see Related 1 , News #112388).

Answered

Question #3

How much time does Apple have left to secure DRAM for the iPhone 18 and iPhone Ultra launches?

Apple has less than six weeks before its expected iPhone 18 and foldable iPhone Ultra launch to secure DRAM. Assemblers are reportedly rushing DRAM orders to lock in supply.

Answered

Question #4

Which of CXMT’s domestic customers have already booked much of its DRAM output?

CXMT’s domestic customers Huawei and Xiaomi have reportedly booked much of its DRAM output well in advance.

Answered

Have a question about this content not listed here? Ask below and TweakBot will answer it.

Your questionAsk

Answering your question×

TweakBot is analyzing your question…

Could not get an answer

TweakBot is generating an answer

Read More

Was TweakBot helpful?Thanks for the feedback!

There's also a political angle to this, since CXMT still sits on a US blacklist, so even a successful deal would have come with its own headaches. However, for now, the more important part is that buyers should get ready for a big price jump on iPhones this fall.