Apple negotiates to buy Chinese memory chips from ChangXin and Yangtze

Apple is negotiating with Chinese memory chip manufacturers ChangXin Memory Technologies (CXMT) and Yangtze Memory Technologies (YMTC) about purchasing components and simultaneously seeking approval for such a deal from US authorities — this is how Bloomberg agency describes the company's attempt to mitigate the effects of the global memory chip shortage.

Why Apple turned to China

The global market for RAM and flash memory has encountered an acute shortage. The main reason is the explosive growth in demand for DRAM and NAND chips from data centers, which technology giants are building to train and operate large language models. AI servers consume many times more memory than ordinary computing equipment, and memory manufacturers primarily fulfill these contracts.

As a result, consumer electronics manufacturers — smartphones, laptops, tablets — found themselves in a situation where they had to compete for the remaining production capacity with AI industry giants. Apple, one of the world's largest buyers of memory chips for iPhone, iPad and Mac, is seeking alternative sources of supply to avoid dependence solely on South Korean Samsung and SK Hynix, which traditionally redirect priority volumes to customers willing to pay more for AI server memory.

Who are CXMT and YMTC

ChangXin Memory Technologies (CXMT) is China's largest manufacturer of DRAM chips, operating from the city of Hefei. Yangtze Memory Technologies (YMTC) is the leading Chinese manufacturer of NAND flash memory headquartered in Wuhan. Both companies have lagged behind South Korean and American competitors in technology for years, but thanks to government support and growing domestic demand, have significantly increased production capacity over the past few years.

• Apple is in negotiations with CXMT (DRAM) and YMTC (NAND) about memory chip supplies
• The purpose of the purchase is to reduce the impact of the global memory shortage on Apple's device production
• YMTC previously appeared in lists of companies causing concern among US regulators
• Apple is simultaneously seeking approval for the deal from US authorities
• The context for Bloomberg's material was provided by journalist Minmin Luo

Why the deal is politically risky

Purchasing components directly from Chinese chip manufacturers contradicts Washington's years-long course of restricting technological cooperation with China in the semiconductor industry. YMTC at various times has appeared on lists of companies causing concern among American regulators on national security grounds. This is why, according to Bloomberg, Apple is not just making direct arrangements with suppliers, but is in parallel lobbying American authorities for permission to make such a deal — a typical purchase from export-control-sensitive companies would require separate coordination.

For Apple, this is a compromise between economic expediency and reputational risk: the company has long sought to diversify its supply chain and reduce dependence on China in the manufacture of finished devices, but at the same time is forced to seek new component suppliers in China in areas where there are simply not enough alternatives on the market.

What this means

The shortage of memory caused by the AI infrastructure boom is forcing even the world's largest electronics manufacturers to seek non-standard sources of supply and negotiate with Washington about exceptions to existing restrictions. This is yet another sign that demand for AI computing is already noticeably reshaping the entire global semiconductor supply chain — to the point of determining who will trade memory chips with whom.