Apple Eyes More DRAM Suppliers, Reigniting China Memory Chip Speculation

Apple CEO Tim Cook indicated a need to diversify the company's DRAM suppliers, suggesting that having more than the current three would be beneficial. Speaking during a quarterly earnings call, Cook stated that an increase in suppliers could help alleviate memory price pressures, which are increasingly impacting Apple's business. He previously described the memory supply shortage as a "once-in-a-century flood" to The Wall Street Journal.

“

If the number of DRAM suppliers increases from the current three, it would be helpful.

Cook's remarks have led to speculation within the semiconductor industry that Apple might be considering China's Yantai-based memory chip manufacturer, CXMT, as a potential fourth supplier. This potential move comes as Apple faces rising memory prices, which have been exacerbated by a limited number of suppliers, primarily Samsung Electronics, SK Hynix, and Micron. Cook expressed that while the impact on pricing remains uncertain, expanding the supplier base could positively affect supply.

However, Apple's potential consideration of Chinese memory chips has drawn scrutiny from U.S. politicians. Reports indicate that high-ranking officials, including Treasury Secretary Scott Bessant, have been lobbied by Apple regarding the use of CXMT products. In response, several U.S. lawmakers, including Senators Chuck Schumer and Mike Crapo, have sent a letter to Apple urging the company not to use memory chips from CXMT or YMTC, even for products manufactured exclusively for the Chinese market. They have demanded a response by August 21.

“

The memory market prices appear to continue to rise after September, and this could have an increasingly significant impact on our business.

This development occurs as Apple announced its fiscal third-quarter results, with revenue reaching $109.42 billion and net profit at $29.79 billion, marking significant year-over-year increases. The earnings call also highlighted Cook's upcoming transition; he is set to step down as CEO on September 1, handing over the role to John Ternus, who currently leads hardware engineering, while Cook will move to the position of board chairman.

“

There are currently three suppliers in the DRAM market, and having more suppliers would not only help in terms of supply but could also have a positive impact in terms of price.