China’s memory semiconductor firm ChangXin Memory Technologies (CXMT) has rejected Apple’s demands for price cuts, causing mobile DRAM supply negotiations between the two companies to collapse definitively. CXMT insisted on unit prices at or above those of products from Samsung Electronics (005930.KS) and SK Hynix (000660.KS), a stance backed by massive orders from Chinese tech giants like Tencent and ByteDance.

According to a report on August 6 from China Fund News, a state-run financial media outlet, Apple had been negotiating LPDDR5X low-power DRAM supply prices with CXMT to reduce the manufacturing costs of next-generation iPhones and other smart devices. However, the talks fell through after CXMT refused to accept Apple’s demands for price reductions. An industry source told the outlet, “The price CXMT proposed was higher than, or at the very least comparable to, those of Samsung Electronics and SK Hynix.”

CXMT’s hardline stance was made possible by explosive domestic demand for memory in China. In June, CXMT signed a $3 billion supply contract with Tencent, followed last month by a long-term deal with TikTok parent ByteDance worth up to $7 billion over five years. Reuters, citing multiple sources, reported that CXMT is also discussing similar supply agreements with other Chinese tech giants, including Alibaba, Huawei, Xiaomi, and Lenovo. With a significant portion of its production capacity already locked into long-term contracts, CXMT had little incentive to lower prices while also navigating Apple’s stringent quality certification process.

Demand from outside China is also on the rise. Nikkei Asia reported on the same day, citing sources, that major PC manufacturers including HP, Asus, and Acer completed quality certification for CXMT DRAM around mid-year and have begun limited deployment in select notebooks. These products, however, are only sold in markets outside the U.S., and supply volumes to overseas PC makers are reportedly limited as CXMT prioritizes allocations for its domestic customers.

Some analysts suggest Apple’s negotiation attempt was more a strategy to strengthen its bargaining power with existing suppliers than a genuine pursuit of large-scale purchases. The U.S. government and Congress have shown strong resistance to the use of Chinese-made memory. CXMT and Yangtze Memory Technologies Co. (YMTC) are both on the U.S. Department of Defense’s “Chinese Military Companies” blacklist. On July 29, a bipartisan group of lawmakers led by Senate Democratic Leader Chuck Schumer sent a letter to Apple urging the company not to use CXMT or YMTC chips in any of its products. Given that Apple previously attempted to include YMTC in its supply chain only to scrap the plan following congressional backlash, the likelihood of CXMT entering Apple’s core component supply chain was considered low from the start.

The collapse of these negotiations is likely to benefit Samsung Electronics and SK Hynix. With fewer alternative suppliers available to Apple, the two South Korean companies’ bargaining power in price negotiations could be further strengthened. Just a few years ago, entering Apple’s supply chain carried significant symbolic weight, representing both large-scale order guarantees and technological validation. However, with the proliferation of AI driving a surge in HBM production and tightening the supply of commodity DRAM like LPDDR5X, pricing power appears to be shifting toward the chipmakers. Apple CEO Tim Cook noted during a conference call late last month, “We expect DRAM costs to increase further next quarter,” adding that “having more DRAM suppliers would be helpful.”

The adoption status of CXMT DRAM by major PC manufacturers is as follows.

ManufacturerAdoption StageNotesHPQuality certification complete, deployed in select notebooksSold in markets outside the U.S.AsusQuality certification complete, deployed in select notebooksSold in markets outside the U.S.AcerQuality certification complete, deployed in select notebooksSold in markets outside the U.S.

Note: Based on Nikkei Asia reporting. Supply volumes to overseas PC makers are limited as CXMT prioritizes domestic customers.

CXMT’s recent large-scale supply contracts are as follows.

CounterpartyContract TimingValueTencentJune 2026$3 billion (approximately 4.3 trillion won)ByteDanceJuly 2026Up to $7 billion (approximately 10 trillion won) over 5 years

Note: Based on China Fund News reporting. CXMT is reportedly discussing contracts with several other Chinese tech giants.

Meanwhile, Gizmodo pointed to CXMT’s ties to the Chinese government’s “military-civil fusion” policy, reporting that the U.S. is unlikely to tolerate the market entry of Chinese-made memory. The global DRAM market is currently dominated by an oligopoly of three players: U.S.-based Micron and South Korea’s Samsung Electronics and SK Hynix. Micron has secured multi-billion-dollar, five-year long-term contracts with major tech firms, keeping prices elevated. The outlet projected that memory prices are unlikely to improve before 2027, diagnosing the situation as one where “either the AI boom collapses, PC manufacturers find a new source of RAM, or personal computers become a luxury item for the wealthy.”