Apple Inc. is reportedly lobbying the Donald Trump administration to keep ChangXin Memory Technologies (CXMT) off the U.S. Entity List to secure a vital supply of DRAM chips, a move analyst Ming-Chi Kuo says is driven by a worsening supply gap rather than a desire to lower costs. The push for an additional source comes as the global memory market faces a structural shift, with AI data centers expected to redirect significant capacity away from consumer electronics over the next two years.

AI demand reshapes memory allocation

Kuo estimates that 15% to 20% of memory capacity currently allocated to consumer electronics in 2026 could be redirected to AI data centers in 2027. This reallocation threatens to create a widening supply-demand gap through 2027. As a consequence, Apple could receive 10% to 20% fewer A20 chips than originally planned during the second half of 2026 through the first quarter of 2027 due to tight LPDDR memory supply. Kuo noted that some of this potential shortfall might also reflect Apple overbooking orders.

Cost reduction not the primary driver

The analyst argued that adding CXMT would not significantly lower Apple's memory costs because the Chinese chipmaker's IPO filing indicates its production capacity remains well below domestic demand. Kuo stated that even if Apple's lobbying succeeds and it buys DRAM from CXMT, that would not materially lower costs or fill the supply gap. Instead, the company is seeking an additional source as the global memory imbalance worsens. This contrasts with Apple's reported evaluation of Yangtze Memory Technologies in 2022, which was primarily aimed at reducing NAND costs, whereas the CXMT push is about managing DRAM supply risk.

Supply constraints and recent price hikes

Kuo's comments followed a Financial Times report regarding Apple's efforts to obtain assurances that CXMT will not be added to the Commerce Department's Entity List. While CXMT remains on the Pentagon's 1260H list, Apple is seeking greater certainty as an industrywide memory shortage drives higher component costs and longer delivery times. Last week, Apple raised prices on products including the MacBook Neo, MacBook Air, iPad Pro, iPad Air, HomePod, HomePod mini and Apple TV, citing tighter memory and storage supplies amid rising AI infrastructure demand.

Impact on Micron Technology

Milk Road AI analyst Melvin suggested that concerns regarding Apple's reported push to source memory chips from CXMT hurting Micron Technology Inc. may be overstated. Melvin stated that Micron's growth is increasingly tied to high-bandwidth memory (HBM) for AI rather than commodity DRAM. He argued that CXMT mainly competes in commodity memory products such as DDR4, DDR5 and LPDDR chips used in consumer devices, while remaining at least one generation behind in HBM technology. Consequently, Apple's efforts are aimed at lowering memory procurement costs for consumer devices, whereas Micron is focused on higher-value AI memory products where tight supply continues to support pricing.

Gerard Meade, the vice president who led hardware engineering for Apple Inc.'s Vision Pro headset and smart glasses division, is reportedly set to join OpenAI's hardware unit by next week. Meade will contribute to OpenAI's upcoming AI-powered device lineup, Bloomberg reported on Friday, citing sources. His exit comes amid a broader restructuring at Apple under new chief hardware officer Johny Srouji.

Meade spent seven years heading Vision Pro hardware engineering and overseeing the development of display-free AI smart glasses intended to rival Meta's growing wearables lineup. According to Bloomberg, Srouji initiated a controversial shake-up of Apple's hardware engineering unit in recent weeks. This led to several vice presidents under John Ternus being given new roles and some executives feeling they had been demoted.

Ternus, who previously led all of Apple's hardware engineering and was Meade's former boss, became chief executive officer on Sep. 1, succeeding Tim Cook. Srouji then took over as chief hardware officer, replacing Ternus, and launched a restructuring that has unsettled several senior hardware leaders.

At OpenAI, Meade will join former Apple executives Jony Ive, Tang Tan and Evans Hankey, who founded an AI hardware startup that OpenAI acquired last year for $6.5 billion. OpenAI's hardware expansion is part of a broader talent push. Noam Shazeer, former Gemini co-lead and vice president of engineering at Google DeepMind, recently joined OpenAI. The company also hired Liz Wamai from Netflix as head of recruiting and brought on former White House AI adviser Dean Ball in a strategy role.

Key Executive Movements