CXMT Isn't Actually Cheaper! Tim Cook Lobbies Trump to Allow Chinese Memory Chips, South Korean Think Tank Says: Apple's Real Goal Is Price Negotiation

Apple Inc. unexpectedly raised retail prices for its MacBook and iPad lines by up to 20% in June, triggering a single-day stock plunge that erased $263 billion (approximately NT$8.4 trillion) from its market value. CEO Tim Cook attributed this crisis directly to "unreasonably high" memory prices. Soon after, reports emerged that Apple was considering lobbying the U.S. government for special permission to purchase memory chips from Chinese manufacturer ChangXin Memory Technologies (CXMT), a company on the U.S. blacklist.

In response, South Korea—home to two of the world’s largest memory suppliers—offered a different interpretation. The Korea Herald cited analysts from the Korea Institute for Industrial Economics & Trade (KIET), suggesting Cook’s move is less about actual procurement from China and more of a two-pronged strategy: justifying price hikes while pressuring suppliers to lower costs.

KIET senior semiconductor researcher Kim Yang-paeng stated that from a consumer perspective, a 20–30% price surge naturally raises suspicion that Apple is pocketing the difference. Cook, therefore, needs a compelling narrative: "Apple has done everything possible—even risking national security accusations by engaging with cheap Chinese memory—but found Chinese yields too low, forcing us to stick with expensive Korean chips."

On September 9, 2025, in Cupertino, California, Apple CEO Tim Cook took the stage at Apple Park to announce new products. (AP)

According to an exclusive report by the Financial Times, Apple has already begun early technical validation of low-power LPDDR5X memory chips produced by China’s CXMT, potentially for devices sold domestically in China. Bloomberg confirmed that CEO Cook personally lobbied senior Trump administration officials on the matter.

After these reports spread across international media, Asia-Pacific capital markets reacted sharply. Despite Samsung Electronics reporting record quarterly profits, its stock dropped 6.25%. Rival SK hynix fell 5.68%. Investors seemed less concerned with strong earnings and more worried: Has China finally emerged as a credible challenger to South Korea’s long-standing duopoly in the global memory market?

However, Cook’s carefully orchestrated strategy quickly hit two insurmountable walls.

The first wall is technological deficiency. Ray Wang, head of research at Seoul-based semiconductor think tank SemiAnalysis, stated that Apple’s evaluation of CXMT’s LPDDR5X chips remains at an extremely early conceptual validation stage, far from commercial mass production. CXMT lags significantly behind Samsung, SK hynix, and Micron in Apple’s key metrics: power efficiency, wafer yield, and data transfer speed.

Moreover, a common misconception is that CXMT offers a cheaper alternative. In reality, due to U.S. equipment sanctions, CXMT’s per-bit production cost for DDR5 chips is over 30% higher than South Korean manufacturers'. Bank of America Securities (BofA) warned in a recent client report that even if CXMT chips are eventually approved, they would likely only be used in low-end iPhones sold in China—models that currently lack market appeal.

The second wall is political resistance from U.S. hardliners in both parties. As CXMT remains on the Pentagon’s blacklist, House Select Committee on the Chinese Communist Party Chair John Moolenaar issued a strong statement condemning Apple’s potential collaboration with Chinese military-linked firms as an "extremely serious and fatal mistake."

This isn’t Apple’s first such attempt. In 2022, Apple secretly planned to source NAND flash chips from Yangtze Memory Technologies (YMTC), but was forced to withdraw after warnings from then-Senator Marco Rubio, now Secretary of State.

Given the low feasibility, why is Cook making such a public show? South Korean analysts believe this is Apple’s most sophisticated negotiation tactic. Testing CXMT chips sends a strong signal to Samsung and SK hynix: Apple is actively exploring alternative supply chains. The mere existence of this option—without needing to deploy it—grants Apple leverage in price negotiations.

By manufacturing the perception of a rising Chinese competitor, Apple gains bargaining power in long-term agreements (LTAs) with South Korean suppliers, even as the world remains heavily dependent on Korean memory.

Samsung’s popular NAND memory product. (via Samsung Electronics official social media)

Still, the KIET believes the so-called "red supply chain" threat is a long-term inevitability but not an immediate crisis. CXMT’s current production capacity is already fully absorbed by domestic Chinese brands. New fabs will take years to come online. Even by 2027, CXMT’s share of global DRAM output is projected to rise only from 9% to around 12%.

Meanwhile, Apple faces growing hardware demands due to AI. With the launch of Apple Intelligence, large language models (LLMs) must run efficiently on smartphones and laptops. This requires keeping massive model weights in fast-access RAM; retrieving them from flash storage would cause system freezes.

As a result, in late 2024, Apple broke precedent by doubling the base RAM of its $999 MacBook Air from 8GB to 16GB without raising the price. This same upgrade applies to the iPhone 17 and all iPad models, meaning Apple now purchases significantly more DRAM per device than in 2023.

Coincidentally, this hardware upgrade comes amid a global memory shortage. AI systems and data centers are consuming vast quantities, creating massive demand. Currently, nearly 70% of global DRAM capacity is controlled by Samsung (38%) and SK hynix (29%). In the short term, Apple has no viable alternative suppliers.