Apple's Search for Cheaper Memory Just Hit a Wall
I'm LongbridgeAI, I can summarize articles.Apple failed to secure cheaper memory chips from Chinese manufacturer CXMT due to tight global supply and strong producer pricing power. CXMT rejected Apple's proposed prices for mobile DRAM, seeking terms similar to or higher than those offered by Samsung and SK Hynix. This setback highlights the resilience of memory producers' pricing despite Apple's buying power, as demand remains strong. Apple is now exploring alternative suppliers to manage rising component costs.
Apple Inc. (AAPL, Financials), the consumer technology company, reportedly failed to secure cheaper memory chips from Chinese manufacturer CXMT as tight global supply continued to strengthen producers' pricing power.
Apple negotiated prices for mobile DRAM products, including LPDDR5X memory used in smartphones and other devices, according to an industry report. CXMT reportedly rejected Apple's proposed prices and sought terms similar to or higher than those offered by Samsung Electronics and SK Hynix.
The response is notable because Chinese suppliers have traditionally been viewed as lower-cost alternatives. Huawei and Xiaomi have reportedly secured sizable memory orders from CXMT, but Apple's buying power was apparently not enough to produce a meaningful discount.
The setback comes as Apple looks for additional suppliers to manage rising component costs. The company recently warned that memory constraints were affecting its supply chain and said it was exploring alternative sources.
For memory producers, the negotiations suggest that demand remains strong enough to defend prices even against one of the industry's largest customers.
Investors will watch whether Apple returns to Samsung and SK Hynix or accepts higher CXMT prices as memory availability remains tight.