Apple looks to Chinese CMXT products to overcome memory chip supply crunch

[Financial News] Apple’s chief executive said the global memory chip supply crunch amounted to a “crisis” and that the company needed to consider every option, including bringing in chips made in China. Although U.S. political leaders strongly oppose the use of Chinese memory chips, Apple is leaving open the possibility of diversifying its supply chain to address shortages and rising prices.
According to the U.S. news magazine TIME on the 15th (local time), Apple CEO John Ternus said in an interview conducted in advance, “Memory supply constraints are clearly a crisis situation,” adding, “We have to put every option on the table.”
Apple has reportedly been considering adopting products from Chinese company ChangXin Memory Technologies (CMXT) as memory chip prices have risen amid a surge in demand from the artificial intelligence (AI) industry.
The Wall Street Journal (WSJ) previously reported on the 9th, citing multiple sources, that Apple had tested using CMXT memory chips in products such as iPhones and MacBooks, and was considering using the chips in some products sold in China.
Apple reportedly hopes to obtain approval from the U.S. administration for transactions with Chinese companies. Ternus, however, did not say whether Apple would actually adopt Chinese memory chips or disclose any specific plans for selecting suppliers.
U.S. political leaders are strongly opposing the use of Chinese memory chips. Last July, John Moolenaar, chairman of the House Select Committee on China, and Representative George Whitesides sent a letter to Commerce Secretary Howard Lutnick urging him not to approve U.S. companies’ purchases of Chinese memory chips.
The lawmakers specifically named CMXT and Yangtze Memory Technologies (YMTC), arguing that buying semiconductors from Chinese companies was tantamount to funding the technological development of the Chinese People’s Liberation Army.
They also stressed that the United States should work with allies, including South Korea, Japan and the European Union (EU), to prevent Chinese companies from entering supply chains by taking advantage of the global memory shortage.
Apple’s move to diversify its supply chain is also a development to watch for Samsung Electronics and SK hynix, which lead the global memory market. Whether Apple actually adopts Chinese products, however, could depend on U.S. regulations and political opposition.
 


[email protected] Lee Seok-woo, International Affairs Correspondent Reporter