- CXMT’s refusal to cut prices marks a turning point in the balance of power between global tech giants and Chinese suppliers
- As AI reshapes the semiconductor market, capacity shortages and rising technology confidence are giving memory makers more leverage
When the world’s most powerful consumer electronics company comes knocking, most suppliers would rush to open the door.
CXMT (长鑫存储), China’s leading DRAM manufacturer headquartered in Hefei, Anhui province, however, chose a different response: no.
The Chinese memory chip maker reportedly rejected Apple’s request for lower-priced DRAM supplies, according to South Korean media outlet Digital Daily.
Apple had approached CXMT seeking DRAM products at prices below those offered by South Korea’s Samsung Electronics and SK Hynix, but CXMT refused to compete on price.
Its message was clear: its quotations would not be lower than those of the two Korean memory giants — and could even be higher.
The negotiation reportedly centered on mobile DRAM products such as LPDDR5X, which Apple needs for future iPhones and other smart devices as it seeks to manage rising manufacturing costs.
But CXMT was unwilling to offer the discounts Apple has traditionally demanded from suppliers, China Fund News reported, citing a story by Digital Daily.
Five years ago, such a scenario would have been almost unimaginable.
With annual shipments exceeding 200 million iPhones, alongside massive businesses in Macs, iPads and other devices, Apple has long been the most powerful buyer in consumer electronics supply chains.
For countless Chinese manufacturers, entering Apple’s supplier ecosystem was the ultimate goal.
Cutting prices, building dedicated production lines and meeting Apple’s demanding quality requirements were considered the cost of admission.
Companies such as Luxshare Precision (立讯精密), Goertek (歌尔股份) and Lens Technology (蓝思科技) leveraged Apple partnerships to grow from relatively small suppliers into industry leaders.
But today, CXMT is refusing to make even a price concession. The reason is not arrogance. The rules of the game have changed.
A seller’s market
Apple’s outreach to a Chinese memory supplier comes as the global semiconductor memory market enters a new pricing cycle driven by AI.
The explosion of large AI models has made high-bandwidth memory (HBM) a critical component for AI servers, with profit margins several times higher than conventional DRAM.
Samsung and SK Hynix have been shifting production capacity toward HBM, while customers are signing three-to-five-year contracts to secure supply.
The result is a tightening market for traditional DRAM.
According to industry data, SK Hynix, Samsung and Micron now dominate the HBM market, with HBM wafer allocation accounting for 29.2%, 23.4% and 18.8% respectively.
As more capacity moves toward AI-related products, supply pressure has spread across the broader memory market.
Counterpoint data shows that prices for 64GB server memory modules rose 3.5 times between the third quarter of 2025 and the first quarter of 2026, representing an annual increase of nearly 490%.
Mobile memory has also surged. LPDDR5X prices rose as much as 83% in a single quarter, while the cost of a 12GB memory chip has increased by nearly 90% compared with a year earlier.
Memory’ share of smartphone bill-of-materials costs has jumped from roughly 10%-15% historically to 30%-40%, and in some high-memory devices, nearly half of total component costs.
Even Apple’ famously high profit margins cannot fully absorb such increases.
For years, Apple’ procurement strategy relied on competition among multiple suppliers: whoever offered the lowest price won. The company could also use Chinese suppliers as leverage in negotiations with established chipmakers.
That advantage is weakening.
The three major memory manufacturers are now prioritizing AI-related demand, and Apple’ orders — regardless of scale — cannot compete with Nvidia’ enormous appetite for HBM.
With fewer alternatives available, Apple’s bargaining power has naturally declined.
New bargaining power
The immediate reason behind CXMT’s confidence is simple: its production capacity is already in high demand.
Chinese technology companies including Huawei, Xiaomi, Oppo and Vivo, as well as internet giants such as Tencent, Alibaba and ByteDance, have secured CXMT capacity through long-term supply agreements.
Some contracts reportedly involve hundreds of billions of yuan and extend three to five years.
Unlike earlier Chinese semiconductor companies that needed major customers to validate their products and secure growth, CXMT no longer needs Apple orders to fill its factories.
More importantly, CXMT is no longer the low-cost challenger trying to gain market share through discounts.
The company has completed a broad product portfolio spanning DDR4 to DDR5 and LPDDR4 to LPDDR5X.
Since the second half of 2025, CXMT’s DDR5 products have reportedly achieved yields above 90%, while its 17-nanometer process has reached stable mass production with yields exceeding 90%. The technology has already been validated in flagship devices from Huawei and Xiaomi.
The industry generally considers around 85% yield to be the threshold for commercial competitiveness. Samsung’s comparable process reportedly achieves yields of roughly 92%-93%, meaning the gap between CXMT and global leaders has narrowed significantly.
The old formula — Chinese memory chips winning customers by being 20% cheaper — is becoming obsolete. Now that their performance has reached comparable levels, there is little reason to continue selling at a discount.
Not without risk
CXMT may also be calculating another factor: the risks of becoming too dependent on Apple.
The prestige of entering Apple’s supply chain has always been attractive, but the downside can be severe.
O-film Tech (欧菲光), once a major Apple supplier, saw Apple-related business account for around 20% of revenue at its peak and its market capitalization approach 70 billion yuan ($10.37 billion).
After being removed from Apple’s supply chain in 2021, the company accumulated losses of 9.75 billion yuan over three years and has yet to recover from the damage.
Wingtech (闻泰科技) spent heavily to acquire MacBook assembly operations from overseas but later faced U.S. export restrictions, turning the investment into a burden. The production line was eventually sold to Luxshare at a discounted valuation.
For CXMT, the geopolitical risks are even more significant. As a strategically important Chinese semiconductor company already under close U.S. scrutiny, entering Apple’s supply chain could bring political exposure that outweighs potential commercial benefits.
Expanding capacity, cutting prices and taking on policy risks for uncertain orders may simply not be worth it. Instead, CXMT appears determined to maintain control over pricing, technology development and capacity expansion.
The era when Chinese companies competed desperately to enter the Apple ecosystem was driven by clear benefits: higher revenue, faster growth and global recognition.
Today, the equation has changed. Apple contracts appear to be losing their shine in the era of AI.
As AI reshapes global semiconductor demand and Chinese suppliers become technologically stronger, the relationship between buyers and suppliers is being rewritten.
For companies like CXMT, saying “no” to Apple may represent not a missed opportunity — but a declaration that they have finally gained the confidence to negotiate on equal terms.
