Apple explored sourcing DRAM from China’s state-backed CXMT to try to secure lower memory prices for its iPhones, but that approach has not produced relief: reports indicate CXMT is asking for prices that are at or above Samsung’s, removing the alternative Apple had hoped for.
Why CXMT couldn’t undercut Samsung
Samsung’s semiconductor division is profiting heavily from AI-driven demand for memory chips, a dynamic that has tightened supply and pushed prices up for consumer electronics manufacturers. That pressure has made it difficult for device makers to obtain memory at prices low enough to avoid substantial price increases for end users. At the same time, Samsung’s mobile division is facing losses, contributing to higher prices for its latest foldables and fueling rumors of price hikes for next year’s Galaxy S27 series.
Apple spent considerable time lobbying the US government for a waiver that would allow it to source memory from CXMT, reasoning that CXMT’s exclusion from the global memory supply chain might allow it to offer commodity DRAM cheaper than the three dominant players—SK Hynix, Samsung and Micron. The move may also have been intended as a negotiating tactic, a credible threat to introduce a fourth supplier and soften pricing from Samsung and SK Hynix.
But reports suggest CXMT is demanding prices that are no lower than Samsung’s. CXMT does not appear to be sitting on idle capacity: most, if not all, leading Chinese device makers such as Huawei, Xiaomi, OPPO and VIVO, and major Chinese internet companies including Tencent, Alibaba and ByteDance, have locked in CXMT’s production capacity through high-priced, long-term contracts. Those companies have their own AI infrastructure needs and, unable to tap global memory supply chains easily, treat CXMT as their reliable alternative.
That situation exposes how the DRAM market’s power structure has shifted: when a supplier under consistent US government pressure declines to undercut the major producers even on the opportunity to supply memory for hundreds of millions of Apple devices, it is a strong data point about current market dynamics. CXMT appears to be seeing enough local demand that it does not need to undercut Samsung; effectively, its price floor aligns with Samsung’s, and anyone wanting chips must match that level or pay more to secure supply.
Any hope Apple may have had that CXMT could let it avoid raising iPhone prices, or at least undercut Samsung’s mobile division on cost, is therefore gone; Apple customers face the same market realities as Samsung buyers. Apple still retains an advantage Samsung does not: its services business—which includes the App Store, Apple Music, iCloud and Apple TV+—generates substantial profits that Apple could deploy to manage hardware margins. Holding iPhone prices flat while memory costs rise is a margin-management decision for Apple; Samsung’s mobile division lacks a comparable, high‑cash business segment and has fewer options besides absorbing losses. Apple’s balance sheet and services revenue may buy its customers some time before they bear the full brunt of the prevailing market dynamics, a luxury Samsung’s customers do not have.
