Apple (AAPL) Stock Rises as It Seeks Approval to Buy Chips From Blacklisted Chinese Supplier CXMT

TLDR

• Apple is lobbying the Trump administration for approval to buy memory chips from Chinese firm CXMT, which is on the Pentagon’s Chinese Military Company list.
• Apple raised MacBook and iPad prices by 20% due to rising memory costs, and is looking for cheaper supply options.
• CXMT makes conventional DRAM but does not produce high-bandwidth memory (HBM), the chip type driving Micron’s AI-related growth.
• Micron (MU) stock fell 6.69% on the news, but analysts say the competitive threat to Micron is limited.
• Congressional opposition remains a major hurdle, as a similar attempt with Chinese firm YMTC in 2022 drew immediate pushback from lawmakers.

Apple is in talks with U.S. officials to get the green light to purchase memory chips from ChangXin Memory Technologies (CXMT), a Chinese manufacturer listed on the Pentagon’s Chinese Military Company list, according to a Financial Times report published Friday.

Apple Inc., AAPL

AAPL stock was up 3.14% to $283.78 at the time of reporting. Micron (MU) fell 6.69% on the news.

Apple has been seeking assurances from the Commerce Department and other administration officials that buying from CXMT would not trigger future restrictions or penalties. While purchasing chips from CXMT is not outright banned, doing so without government approval could expose Apple to political and reputational risk.

The push comes after Apple raised prices on several MacBook and iPad models by around 20%. CEO Tim Cook said the company could no longer absorb the rising cost of components, particularly memory. That announcement sent AAPL to its worst single-day loss in over a year.

DRAM prices have surged in recent years, driven by tight supply and exploding demand from AI infrastructure. Apple, the world’s largest memory buyer, is now looking to diversify its supply chain to bring those costs down.

What CXMT Actually Makes

CXMT produces conventional DRAM products — DDR5 for PCs and servers, LPDDR5X for smartphones, and enterprise memory modules. What it does not make is high-bandwidth memory (HBM), the premium chip powering Nvidia’s AI accelerators and the data centers behind the current AI spending wave.

That’s the key point for Micron investors. HBM is where Micron’s margins and earnings growth are concentrated. CXMT simply does not compete in that space. Even if Apple wins approval and starts buying from CXMT, Micron’s HBM business would be unaffected.

Micron, Samsung, and SK Hynix all produce HBM. CXMT does not.

Apple Helped Create the Problem It Now Wants Out Of

There’s some irony here. During the last memory market downturn, Apple used its massive purchasing power to push suppliers like Micron to rock-bottom prices. Micron’s Chief Business Officer Sumit Sadana publicly said Apple’s tactics were “not constructive,” as they discouraged investment in new manufacturing capacity.

Suppliers delayed or cancelled expansion projects. Then AI demand hit, and the market had no room to respond quickly. The shortage and elevated prices Apple now faces are partly a result of that earlier pressure.

Apple tried something similar in 2022, when it explored sourcing from another blacklisted Chinese firm, YMTC. Members of Congress quickly warned the company to back off, citing national security concerns. CXMT faces the same scrutiny, and it’s unclear whether the White House would support the request.

CXMT recently received approval to pursue a listing on the Shanghai stock exchange and has been expanding production with backing from the Chinese government.

Samsung Electronics fell 5.30% and SK Hynix dropped 8.36% on the news.

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