Apple Can Only Feasibly Use CXMT’s Low-Spec LPDDR5X Chips Within The iPhone 18e, But Bank Of America Thinks Apple’s Main Target Is To Increase Its Bargaining Power

It never did make much sense for Apple to procure DRAM from CXMT for exclusive use within China. After all, the DRAM's specs are decidedly inferior, suitable only for budget offerings that do not command much volume within the Asian giant's market.

Even so, a major US bank has now offered a simpler explanation behind Apple's willingness to risk the ire of the Trump administration, and it all might have to do with negotiation leverage.

Apple is trying to use CXMT's LPDDR5X chips as the proverbial bogeyman in its power play with the so-called Big Three

First, the Financial Times reported recently that Apple was lobbying the Trump administration for clearance to buy DRAM from CXMT, which remains in a Pentagon blacklist for its connections to China's People Liberation Army.

Then, just last week, Bloomberg's Mark Gurman disclosed that Apple was working with the Trump administration to minimize any blowback in Washington if it does end up procuring memory resources from CXMT and YMTC for its products sold in China.

Of course, as we noted at the time, the move never made much economic sense, especially as a lot of CXMT's capacity is locked behind long-term agreements or LTAs, its massive AI-focused DDR capacity is of no use to Apple, while the limited LPDDR capacity comes at prices that are equivalent to those from Samsung, SK hynix, and Micron, and finally, its DRAM can only be used for products sold within China.

BofA on Apple $AAPL and CXMT:

"We do not expect Apple to meaningfully adopt CXMT’s DRAM. Three reasons: (1) US’s restriction on China semis, (2) DRAM quality to meet Apple’s specs (10Gbps+ speed, 1.1V power consumption, ECC function), and (3) DRAM IPs owned by major Korean/US… https://t.co/L8dfTeBkxN

— P Equity Research 📰 (@pequityresearch) July 5, 2026

Now, however, the Bank of America has just published an interesting note that places Apple's confounding CXMT-related move within a rational framework.

The Bank of America starts by correctly pointing out that Apple can't "meaningfully" adopt CXMT's DRAM due to:

1. Technical shortcomings, including Apple's requirements that the LPDDR5X chip sport speeds that are well in excess of 10 Gbps, while those from CXMT max out at 10.667 Gbps, and further hampered by higher parasitic capacitance and current leakage, which collectively are a function of CXMT's older fabrication node.
2. Litigation threats from Samsung, SK hynix, and Micron, who own material DRAM-related intellectual property and might try to implicate Apple in patent infringement lawsuits.

As such, the Bank of America thinks Apple can only use CXMT's DRAM in low-end products such as the iPhone 18e, and even then not in any "significant" volume, "given weak sales volume of low-end iPhones in China."

Apple can, however, use CXMT-sourced DRAM to increase its negotiation leverage with Samsung, SK hynix, and Micron:

"Apple may try to use CXMT’s DRAM to increase bargaining power when it negotiates 2H or 2027 contract prices with Korea/US big-3 DRAM makers, though actual purchasing volume (from CXMT) remains small."

So, there you have it. Apple is apparently burning its political capital in Washington just so it can enter upcoming DRAM pricing negotiations with the Big Three while bearing a stronger hand.

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