Apple Tests Blacklisted Chinese Chips as iPhone Prices Set to Soar

Apple Inc. has initiated testing of memory chips manufactured by Chinese company ChangXin Memory Technologies (CXMT) for potential integration in its iPhone and MacBook product lines, the Wall Street Journal reported on Sunday. The company is engaged in preliminary discussions with CXMT regarding a potential supply partnership. The Pentagon has designated CXMT on its roster of entities allegedly connected to China's military apparatus. Any supply agreement with CXMT requires approval from the White House, and U.S. export restrictions prohibit American corporations from transferring technology to CXMT. According to Kevin Wolf, an attorney at Akin Gump specializing in export control matters, Apple’s options are limited to purchasing standard CXMT products and engaging in price negotiations. The exploration of CXMT as a supplier stems primarily from escalating memory component prices, fueled by intense artificial intelligence sector demand. Apple CEO Tim Cook has described the situation as a rare "hundred-year flood" in memory chip pricing. AI data centre construction is expected to absorb roughly 70 per cent of all memory chip production in 2026, and DRAM costs have tripled in the past eighteen months. Apple has already implemented price increases for the iPad, Mac, Apple TV, Apple Vision Pro, and HomePod but left the iPhone, AirPods, and Apple Watch prices unchanged. However, a new rumor from Weibo user Fixed Focus Digital suggests that the iPhone 17 will see a price increase as soon as Monday, August 10. The company also declared a quarterly dividend distribution of $0.27 per share, with August 10 established as the record date. CXMT completed its listing on the Shanghai stock exchange recently and has become mainland China’s highest-valued publicly traded enterprise. The company’s second-quarter revenue exceeded the prior year’s figure by more than eight times. However, CXMT has reached maximum production capacity for the current year, leaving minimal availability for additional international clients. HP and Acer have already obtained limited quantities and are pursuing agreements to secure larger allocations for 2027. Apple delivered Q3 revenue of $109.42 billion, marking a 16.4% year-over-year increase and surpassing projections. Apple stock is currently trading at $313.33. Certain U.S. government officials express concern that substantial orders from major American corporations could provide CXMT with financial resources and indirect exposure to American technological know-how.