Apple begins testing CXMT chips for devices sold in China, FT says

In a significant development, Apple has initiated testing of DRAM chips from ChangXin Memory Technologies (CXMT), a state-owned enterprise from China, specifically for products sold in the Chinese market. This move comes as the company actively engages with U.S. authorities to seek permission for broader integration of CXMT's technology into its device lineup. As geopolitical tensions rise, Apple's collaboration with Chinese suppliers has become increasingly sensitive, particularly in light of the U.S. government's efforts to limit China's technological advancements. CXMT is positioned to play a pivotal role in China's ambition to create a self-sufficient artificial intelligence supply chain and is anticipated to become one of the most lucrative tech firms to go public in Shanghai, as reported by the Financial Times. The company is reportedly aiming to raise approximately 29.5 billion yuan (around $4.3 billion) in its upcoming IPO. In 2022, Apple encountered considerable resistance from U.S. lawmakers, including then-Senator Marco Rubio, who is now the Secretary of State, during its exploration of partnerships with Chinese memory suppliers. CXMT's shareholder structure reveals that at least 15 state-owned entities collectively own 36% of the company, with many of its private investors also receiving support from state-owned partners. Currently, CXMT ranks as the world's fourth-largest DRAM producer, supplying memory chips used in an array of devices from smartphones to servers. Its market share is projected to grow from approximately 11% last year to 15% by 2028, fueled by new production facilities in key Chinese cities such as Hefei, Shanghai, and Beijing, according to data from SemiAnalysis. Despite the anticipated increase in production capacity, analysts caution that CXMT is unlikely to saturate the market with low-cost chips in the immediate term, as much of its output is already allocated. However, industry experts express concerns about a potential repeat of scenarios seen in other sectors, such as solar panels and electric vehicles, where state-supported capacity expansions have led to decreased global prices and pressured foreign competitors. Notably, recent reports indicate that the U.S. has refrained from adding CXMT, AI startup DeepSeek, and over 100 other firms to its trade blacklist, despite their classification as national security risks, aiming to avoid further escalation of tensions with China. Both Apple and CXMT have not yet responded to requests for comments on this matter.