Apple begins testing lower-cost Chinese RAM in iPhones, but it won't lead to savings for consumers.

      The fourth-largest DRAM manufacturer globally, monitored by the Pentagon, is now quietly being tested in Apple’s labs.

      Apple has been discreetly evaluating a new memory supplier for certain products sold in China, and this supplier is attracting significant attention from Washington.

      This is the same company I mentioned previously, amid speculation about Apple contemplating a Chinese memory provider following its recent announcement of a considerable price increase for most of its products (with the exception of the iPhone and Apple Watch).

      So, who is CXMT, and what is Apple doing with its chips?

      ChangXin Memory Technologies, or CXMT, located in Hefei, China, ranks as the world’s fourth-largest DRAM producer, trailing behind Samsung, SK Hynix, and Micron, a type of memory utilized in smartphones, laptops, and servers.

      A recent report from the Financial Times revealed that Apple has already started to test CXMT's chips for devices intended for the Chinese market. This effort is part of a wider push by U.S. tech companies to gain government approval for more extensive usage of CXMT's products.

      However, obtaining this approval may not be straightforward, particularly given that CXMT is on the Pentagon’s list of Chinese Military Companies, which presents reputational and political challenges for Apple.

      Apple faced similar criticism in 2022 when it considered a partnership with YMTC, another Chinese chip manufacturer.

      Will this ultimately lead to lower prices for your devices?

      I doubt it. Analysts from SemiAnalysis indicate that nearly all of CXMT’s production is already allocated. Moreover, the company is projected to face supply limitations for at least the next two years, even as it expands production in Hefei, Shanghai, and Beijing.

      Currently, CXMT accounts for roughly 11% of global DRAM wafer capacity, a number analysts predict will rise to 15% within the next two years.

      In my view, Apple’s testing with CXMT appears to be a supply chain tactic to support local inventory in China rather than a move that could influence global product pricing.

      For now, the report does not suggest that the U.S. government is delaying the decision, although it has done so multiple times in the past, so that’s worth remembering.