Apple pivots to China for memory chips as AI-driven shortage sends prices soaring

Apple is asking the Trump administration for permission to buy memory chips from a Chinese company that the Pentagon has flagged as having ties to the People’s Liberation Army.

The company has approached both the Commerce Department and the White House about sourcing DRAM chips from ChangXin Memory Technologies, known as CXMT. The Chinese manufacturer sits on the Pentagon’s 1260H list of companies with alleged military connections. Apple reportedly began these conversations as early as May 2026, about a month before hiking prices on MacBooks and iPads by around 20%.

The math behind Apple’s desperation

DRAM prices climbed approximately 60% in 2025. The forecast calls for an additional 30-40% increase in 2026, with shortages expected to persist well into 2027.

The culprit is the AI boom, which has an insatiable appetite for high-bandwidth memory. The same factories that used to churn out standard memory chips for laptops and phones are now dedicating their production lines to specialized AI chips instead. That leaves companies like Apple fighting over a shrinking pool of conventional DRAM and NAND components.

CEO Tim Cook has signaled that all vendor options are back on the table.

Apple has tried this before

This isn’t Apple’s first attempt to tap Chinese memory suppliers. Back in 2022, the company explored sourcing NAND flash chips from YMTC, another state-supported Chinese manufacturer, for iPhones sold in the Chinese market. Apple backed off under US government pressure before that arrangement materialized.

CXMT and YMTC both offer lower-cost alternatives to the established trio of Samsung, SK Hynix, and Micron.

What this means for investors

If the Trump administration grants approval for CXMT sourcing, for Samsung, SK Hynix, and Micron, Apple successfully onboarding a lower-cost Chinese competitor would represent a genuine competitive threat.

Even if Apple secures initial approval, the regulatory environment around Chinese semiconductor companies remains volatile. Policy could shift with a single executive order.

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