China's Changxin Memory Technologies doubled its IPO fundraising target for its Shanghai listing to 57.9 billion yuan ($8.6 billion), per an exchange filing on July 14.
Apple has begun testing memory chips made by CXMT for devices sold in China, the Financial Times reported on July 8, citing sources.
Talks between Apple and CXMT are ongoing, and Chief Executive Officer Tim Cook appealed to Trump administration officials, including Treasury Secretary Scott Bessent, to help "soften the political fallout" from a potential deal, Bloomberg reported on July 2, citing sources.
CXMT and Chinese chipmakers are gaining share
Despite lagging its rivals technologically by as much as three years, CXMT is emerging as a strong global alternative to Samsung, SK Hynix and Micron Technology. The Chinese group is well-positioned to increase its DRAM market share from the current 8%, according to data from research outfit Counterpoint.
Beyond memory, Chinese contract chipmakers, led by the $122 billion Semiconductor Manufacturing International, are also forecast to capture a bigger slice of the market for low-end chips, where they face little or no U.S. restrictions or export controls.
Given how dependent modern economies are on such chips and how quickly China has put the squeeze on other key industry inputs like rare earths, Washington, Seoul and other governments may have little choice but to invest in bulking up secure supply chains for the semiconductor sector's least glamorous corner.
Apple’s China plea highlights low-tech chip shortages
China's most important chipmakers may be its most boring ones. Case in point is state-backed Changxin Memory Technologies, which makes low-tech data-storage semiconductors. A global supply crunch has forced even $4.6 trillion Apple to turn to CXMT for supplies, supporting the Chinese firm's move on Tuesday to double its Shanghai IPO fundraising target to $8.6 billion. It signals a rethink of the strategic value of low-margin chips.
For years, Western policymakers and manufacturers have prioritised advanced silicon as cutting-edge processors from Nvidia and high-bandwidth memory from Samsung Electronics and its rivals emerged as critical AI assets. Lower expected returns from building new factories dedicated to churning out mature chips turned off investors as well.
Underinvestment is squeezing consumer electronics and automakers
The resulting chronic underinvestment is now squeezing everyone from consumer electronics firms to automakers. This issue is most severe in dynamic random access memory, or DRAM, where surging costs and shortages are squeezing handset makers from China's Xiaomi to Apple.
To cope, the U.S. company has raised iPad and MacBook prices and is in talks with CXMT to secure supplies for devices sold in the People's Republic, the Financial Times reported this month, citing sources. Tim Cook, per a Bloomberg report, had to personally appeal to White House officials given that the chipmaker has been blacklisted by the Pentagon, which alleges CXMT has ties to the Chinese military.
AAPL•
