Apple Assessing Chinese Memory Suppliers to Alleviate Supply and Cost Pressures

Apple (AAPL-US) stated during its latest earnings call that, as memory prices continue to rise, the company is assessing different sourcing options—including Chinese suppliers—to improve supply chain flexibility. Although the initiative has drawn opposition from certain U.S. congressmen, Apple has not ruled out any options at this stage.

Apple noted that its memory procurement costs in the first quarter of this year (ending March 31) were higher than in the previous fourth quarter (ending December 31). Costs rose further in the second quarter (ending June 30). While inventory benefits have offset some of the impact, the company expects memory costs to increase again in the third quarter (ending September 30).

When asked whether Apple might source DRAM from China’s ChangXin Memory Technologies (CXMT) or NAND flash memory from Yangtze Memory Technologies (YMTC), the company said it is still reviewing various suppliers. Introducing additional vendors could help improve supply conditions, but it remains uncertain whether it would lower procurement prices.

Recent reports indicate that Apple is reportedly testing DRAM products from ChangXin Memory, suggesting the Chinese memory manufacturer could potentially join Apple’s supply chain in the future. However, such collaboration remains in the evaluation phase, and Apple has not officially announced any procurement decisions.

The Financial Times previously cited sources stating that Apple had sought approval from the Trump administration to purchase DRAM from ChangXin Memory. ChangXin Memory is currently listed on a U.S. blacklist after being designated by the U.S. Department of Defense as having links to the Chinese People’s Liberation Army.

Bloomberg journalist Mark Gurman recently revealed that Apple is communicating with the Trump administration, hoping to minimize political backlash in Washington should it decide to procure memory from ChangXin or Yangtze Memory.

According to current reports, if Apple ultimately sources memory components from Chinese firms, those parts would be used exclusively in products sold within the Chinese market. Nevertheless, this arrangement has failed to alleviate national security concerns among members of the U.S. Congress.

A group of U.S. lawmakers has already urged Apple to abandon its plans to source memory from Chinese companies and demanded that the company commit by August 21 not to pursue such initiatives. The lawmakers also requested full disclosure on whether Apple has ever provided technical information to ChangXin Memory or Yangtze Memory, and what specific details were shared.

Based on Apple’s statements during the earnings call, the company currently prioritizes securing stable supply above all else and has not excluded Chinese suppliers despite congressional pressure. However, whether Apple will ultimately proceed with procurement remains subject to future announcements.