Korea's Korea Investment & Securities (KIS) believes that China's CXMT will be unable to make a definitive impact on the global memory market. The memory shortage, spurred by high demand from AI chips, is once again in the spotlight after consumer electronics giant Apple raised prices for several of its products and cited a memory shortage. Following the price hike, reports have claimed that Apple is requesting the US government to allow it to buy memory chips from China's CXMT.
Chinese Government Could Stop CXMT From Shipping Memory Chips To Foreign Companies, Say Analysts
China's CXMT has been in the news several times over the past couple of months. In June, a report from the Seoul Economic Daily claimed that the Chinese firm had reached parity with its Korean counterparts when it came to HBM3 memory. HBM3 memory is used in NVIDIA's H100 AI GPUs, which are two generations behind the latest Rubin AI chips.
Similarly, other reports have claimed that even Google might be evaluating CXMT's memory chips. With Apple raising its pricing amidst the turmoil in the memory market, others have claimed that the Cupertino, California, technology giant is eager to secure an exemption from the US government to source its memory chips from the Chinese firm.
The firm was designated as a Chinese military company by the Pentagon under the Biden administration and has been approved for admission into the Commerce Department's Entity List as well, as per Reuterss.
CXMT Lacks Sufficient Production Capacity To Make An Impact In International Market, Say Analysts
In a note, Korea's Korea Investment & Securities (KIS) discussed the possibility of Apple sourcing its memory chips from CXMT. The firm believes that any supply is highly unlikely, even if Apple can successfully secure approval from the US government.
According to the firm, even if approval were granted, the Chinese government can restrict CXMT from selling the precious memory chips to foreign firms. This is because Chinese memory production capacity has shifted to DDR memory chips from LPDDR memory chips in order to cater to domestic requirements. The shift has led to a DRAM shortage that has impacted local smartphone companies. Consequently, domestic companies are likely to benefit from the scarce DRAM chips being produced.
KIS adds that the need to cater to the Chinese market also implies that CXMT is unlikely to relieve any pressure in the global memory market. According to the analysts, since CXMT is already hard-pressed to fulfill domestic requirements, it lacks sufficient production capacity to cater to the larger international market.
About the author: Ramish is a seasoned technology writer and editor with more than a decade of experience. He specializes in semiconductor fabrication and market analysis. With a background in finance and supply chain management - via his bachelors in Finance and a micromasters in supply chain management from MIT - Ramish combines financial rigor with deep industry insight to deliver accurate and authoritative coverage.
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