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

According to the Financial Times, Apple has begun testing DRAM chips from China’s state-backed ChangXin Memory Technologies for devices sold in China and is lobbying the US government to allow wider use of CXMT products. reported on Wednesday, quoting people familiar with the matter.

The company’s decision comes at a time when its relationship with Chinese suppliers has become a sensitive geopolitical issue, amid growing U.S. efforts to contain China’s technology ambitions.

The FT said CXMT is set to be at the center of Beijing’s efforts to create a self-sufficient AI supply chain and is expected to be one of the most profitable tech companies to list in Shanghai. It reportedly plans to raise at least 29.5 billion yuan ($4.3 billion) in the upcoming IPO.

Apple has faced significant pushback from US policymakers, including Senator Marco Rubio, who is now Secretary of State, after it investigated the use of Chinese memory suppliers in 2022, the FT reported. At least 15 state-owned shareholders collectively own 36% of CXMT, the report said, and many of the private funds also received support from state-owned limited partners.

The report notes that CXMT is now the world’s fourth-largest manufacturer of DRAM, a memory chip used in a wide range of products from smartphones to servers. According to the report based on SemiAnalytics data, the market share is expected to increase from roughly 11 percent last year to 15 percent by 2028 as new production lines come into operation in the Chinese cities of Hefei, Shanghai and Beijing.

Its main global peers in DRAM include Samsung Electronics, SK Hynix and Micron Technology.

While CXMT’s capacity is increasing, it is unlikely to immediately flood the market with cheap chips because its production is largely pre-committed, memory analyst Ray Wang of SemiAnalytics told the FT.

However, the report notes that the industry fears a long-term repeat of patterns seen in sectors such as solar panels and electric vehicles, where state-backed capacity expansion has ultimately led to falling global prices and squeezing out foreign competitors.

Reuters previously reported The US has delayed adding CXMT, artificial intelligence startup DeepSeek and more than 100 companies to its trade blacklist despite being flagged as a national security risk as the Trump administration seeks to avoid rising tensions with Beijing.

Apple and CXMT did not immediately respond to CNBC’s requests for comment.