As the ongoing component crisis worsens, even the biggest companies are no longer shielded. Apple, in a historic first, raised prices on a fleet of its products yesterday, saying it could no longer protect its customers from the soaring memory and storage costs. Now, the Financial Times is reporting that Apple is trying to lobby the U.S. government to secure official clearance to buy (cheaper) memory from China's CXMT.
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CXMT is not outright banned by the White House, as it's not on the Defense Department's "Entity List," which prohibits Chinese companies entirely on national security grounds. Instead, it's listed in the 1260H list, which still designates it as a Chinese military company, and doing business with it would cause major reputational damage to an American company.
Apple has apparently been reaching out to its allies in Washington to persuade the government to allow it to purchase RAM from CXMT. Unlike Micron, Samsung, and SK Hynix — the coalition controlling 90% of the world's DRAM — CXMT has no real incentive to chase AI buildouts. It can therefore provide RAM at much more reasonable prices without compromising performance.
Recently, Corsair Vengeance DDR5 sticks from China were found to use CXMT modules underneath, signaling the company's entry into the mainstream. That was a 6,000 MT/s CL30 kit, so it seems CXMT certainly has the ability to produce modern silicon at a scale sufficient for a major PC vendor like Corsair. OEMs such as Dell and HP are also adopting Chinese-made RAM for those region-bound systems.
Before that, CXMT has already demonstrated its capabilities for cutting-edge DRAM manufacturing; late last year, it showed off production-ready DDR5-8000 and LPDDR5X-10667 modules. Volume is another issue entirely, but Beijing has certainly figured out how to make performant RAM. If a buyer like Apple were to enter the picture now, even just for the Chinese market, it would completely shift the paradigm.
Of course, such a precedent is subject to approval, and high-ranking officials seem adamant against it. John Moolenaar, the chairman of the House China committee, has warned that Apple partnering "with a Chinese military company would be a grave mistake." He told Financial Times that it's imperative for America not to rely on foreign supply chains for something as critical as DRAM.
Apple is in a dire situation itself, having lost $265 billion off its market cap the day it announced price hikes on MacBooks and iPads. In an uncharacteristic move, Tim Cook even admitted he'd never seen anything like this in his 40+ year stint. The Cupertino giant has always enjoyed comfortable margins on memory and storage upgrades, but it can no longer dam the "hundred-year flood."
"Trump can show the courage to keep American memory alive for our security and our competitiveness or pour it down the drain so Tim Cook can squeeze out a few more points of margin," remarked an ex-official. Another security expert said it wouldn't make sense for the administration to fiercely protect critical earths and rare minerals, while suddenly conceding in the AI race (which is the reason behind the RAMpocalypse).
Whether Apple's efforts in Washington succeed or not is also predicated on the changing of the guard, since Tim Cook will hand over the baton to John Ternus come September — a logistics wizard leaving at perhaps the most decisive moment he was needed. The AI boom is here to stay, and so is the component crisis for now, so it remains to be seen how the company navigates the oncoming challenges.
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