Apple Is Testing Memory Chips From a Chinese Firm Washington Considers a Security Risk

Apple has started testing memory chips made by ChangXin Memory Technologies, a Chinese state-backed manufacturer, for use in devices sold within China, according to a Financial Times report citing people familiar with the matter. The company is also lobbying the U.S. government to allow it to use more of CXMT's components, the FT reported.

It's a delicate move. Apple's ties to Chinese suppliers have become an increasingly touchy subject in Washington as U.S. policymakers push to slow China's progress in critical technology, and DRAM chips, the memory used in everything from phones to data center servers, sit squarely in that fight.

This isn't Apple's first brush with this exact problem. Back in 2022, the company explored using Chinese memory suppliers and ran into sharp criticism from U.S. policymakers, including then-Senator Marco Rubio, who now serves as Secretary of State, the FT reported. That episode shows how fast this kind of sourcing decision can turn into a political flashpoint rather than a routine supply-chain call.

CXMT is not just another vendor. The FT reports the company is expected to become central to Beijing's push for a self-sufficient AI supply chain, and it's on track to be one of the most profitable tech companies to go public in Shanghai. It's reportedly planning an IPO that would raise at least 29.5 billion yuan, or roughly $4.3 billion. Ownership runs deep into the state: at least 15 state-owned shareholders together hold 36% of the company, and many of its private funds also carry backing from state-owned limited partners, according to the report.

A Fast-Rising Player in a Concentrated Market

DRAM has long been dominated by a small handful of companies: Samsung Electronics, SK Hynix, and Micron Technology. CXMT is already the world's fourth-largest DRAM producer, the FT reported, and its market share is projected to climb from about 11% last year to 15% by 2028 as new production lines start up in Hefei, Shanghai and Beijing. Those figures come from SemiAnalysis data cited in the FT report.

That growth trajectory is exactly what worries some in the industry, even if the immediate impact looks limited. Ray Wang, a memory analyst at SemiAnalysis, told the FT that CXMT's expanding capacity isn't likely to flood the market with cheap chips right away, since most of its output is already spoken for through pre-committed orders.

The longer-term concern is different, and it echoes a pattern the tech and manufacturing world has seen before. State-backed capacity buildouts in industries like solar panels and electric vehicles eventually drove global prices down and squeezed foreign competitors out of markets they once dominated. The fear now, according to the FT's reporting, is that DRAM could follow the same script, with CXMT's state-supported scale eventually reshaping pricing and competition well beyond China's borders.

Washington's Balancing Act

The politics here are just as significant as the business logic. Reuters has previously reported that the U.S. has held off on adding CXMT, the AI startup DeepSeek, and more than 100 other companies to its trade blacklist, even though they've been flagged internally as national security risks. The Trump administration, according to that reporting, has been trying to avoid escalating tensions with Beijing, which helps explain why CXMT remains a viable, if contentious, option for a company like Apple.

Apple and CXMT did not immediately respond to CNBC's requests for comment on the FT's reporting.

For Apple, the calculus looks straightforward on the surface: a fast-growing, increasingly capable domestic supplier in the very market where a huge share of its devices are sold and assembled. But given how the 2022 episode played out, and given CXMT's deep state ownership, any expanded use of its chips is likely to draw fresh scrutiny in Washington. The bigger question hanging over this story isn't just what Apple decides, but whether U.S. policymakers are willing to let American tech giants keep quietly deepening ties with the very Chinese suppliers they've spent years trying to box out.