According to finance.biggo.com, Apple is in procurement negotiations with two U.S.-blacklisted Chinese memory chipmakers — CXMT and YMTC — to source chips for devices sold exclusively in the Chinese market, triggering a global semiconductor sell-off on July 3.
Global Market Meltdown
The announcement triggered immediate volatility across major semiconductor equities. SK Hynix shares plunged 15% in a single day; Samsung Electronics fell 9%; Japan’s Kioxia Holdings dropped 13%; and U.S.-based Micron Technology and SanDisk declined 5% and 14%, respectively. The rout spanned markets in the U.S., Japan, and South Korea, underscoring the outsized influence of Apple’s supply chain decisions on global capital markets.
“Chipflation” Drives Strategic Shift
Apple’s move stems from unprecedented cost pressure: general-purpose DRAM prices have surged by a cumulative 700% over the past four years, driven by AI-driven demand for High Bandwidth Memory (HBM). As a result, Apple implemented its most aggressive wave of price hikes in nearly a decade — raising the entry-level MacBook Neo by 900 yuan (≈$133), the MacBook Air by 1,500 yuan, and the base iPad by 800 yuan. An Apple spokesperson stated bluntly in last week’s price-hike announcement:
“The rapid expansion of AI is the culprit; the company has never seen component prices rise so sharply and so quickly.”
Goldman Sachs characterizes this year’s memory market as the most severe supply shortage in 15 years, projecting a DRAM shortfall ratio of 4.9% in 2024, widening to 5.9% in 2025. Meanwhile, SK Hynix’s operating profit margin soared to 72% in Q1 2024 — a direct reflection of constrained supply and elevated pricing power.
Geopolitical Red Line Crossed
Both CXMT and YMTC appear on the U.S. Department of Defense’s “1260H List”, which identifies entities deemed to support China’s military. YMTC was added in January 2024; CXMT joined the list in 2025. Though inclusion does not constitute a legal ban, it serves as a formal warning to U.S. investors and precedes stricter trade controls. According to Bloomberg, officials within the Trump administration have voiced clear opposition to granting Apple a waiver. Tim Cook, CEO of Apple, has personally lobbied senior Washington figures — including Treasury Secretary Scott Bessent — to limit Chinese chip usage strictly to devices sold within China.
This is not Apple’s first attempt: in 2022, plans to use YMTC memory in iPhones destined for China were shelved after pushback following YMTC’s placement on the U.S. Commerce Department’s Entity List. Its revival — now expanded to include CXMT — signals that memory cost pressure has reached an unprecedented threshold.
Micron’s Counterargument
Micron Technology CEO Sanjay Mehrotra responded with rare public criticism, attributing part of the current capacity crisis to prior procurement practices by downstream customers. He noted that during the 2023 memory downturn, some customers suppressed procurement prices to just one-third of normal levels — starving manufacturers of capital needed for R&D and capacity expansion. This dynamic has fundamentally reshaped supplier-customer leverage in the semiconductor supply chain.
Industry data cited in the report confirms China’s growing manufacturing clout: its share of global production capacity for mainstream process nodes surpassed 30% in 2025. While China still lags in cutting-edge nodes like 3nm and 2nm, and in high-end AI chips comparable to Nvidia’s H100/H200, its competitiveness in mature-node memory is now undeniable — offering scale, stability, and extreme cost efficiency.
Source: finance.biggo.com
Compiled from international media by the SCI.AI editorial team.
