Apple is testing DRAM chips from China's ChangXin Memory Technologies (CXMT) for devices sold in China as the state-backed firm accelerates its expansion. The move comes as Apple seeks to secure memory supply amid fears of a global shortage driven by AI infrastructure demand. Analyst Ming-Chi Kuo noted that the push to source from CXMT is about surviving the supply crunch rather than lowering costs.

Supply Gap and Impact

Kuo warned that growing demand from AI data centers will widen the global memory supply gap through 2027. He estimates that up to 20% of memory capacity could shift away from consumer electronics. Apple could receive 10%–20% fewer A20 chips between the second half of 2026 and the first quarter of 2027 due to tight LPDDR memory supply. Some of this shortfall may also stem from overbooked orders.

CXMT's Expansion and Partnerships

CXMT is rapidly expanding its construction in Hefei and has become a cornerstone of China's AI chip ambitions. The company is not on the U.S. Entity List, allowing it to purchase China-approved equipment from partners like ASML Holding NV. CXMT relies on ASML's deep ultraviolet (DUV) lithography machines for production. The partnership is symbolized by a "friendship garden" established at CXMT's headquarters in 2024.

Political and Market Context

U.S. tech companies view CXMT as a potential fourth global DRAM supplier, though the move remains politically sensitive. The Trump administration has reportedly delayed adding CXMT to its trade blacklist to avoid escalating tensions with China. Apple has previously faced criticism from U.S. lawmakers over plans to use Chinese memory chips due to security concerns.

Price Hikes and Product Impact

Last week, Apple raised prices on products including the MacBook Neo, MacBook Air, iPad Pro, iPad Air, HomePod, HomePod mini, and Apple TV. The company cited tighter memory and storage supplies amid rising AI infrastructure demand as the reason for the hikes, while iPhone prices remained unchanged.

Apple Inc shares fell 0.16% to $312.18 on Tuesday as the technology sector faced a broad selloff, dragging the Nasdaq and S&P 500 lower. The stock is trading near its 52-week high of $317.39 but remains under pressure due to sector rotation into Energy and Real Estate. Despite the decline, Apple is holding up better than many large-cap peers, though the weight of the tech selloff keeps it in the red.

Tech Sector Weakness and Market Breadth

The technology sector dropped 1.78% during the session, shifting market leadership toward Energy and Real Estate. Market breadth showed a mildly positive advance/decline ratio of 1.2, offering little support for growth stocks. Apple's performance remains relatively resilient compared to the broader tech sector, but it is not immune to the prevailing selling pressure.

Foldable iPhone Delay and Shipment Forecasts

Analyst Ming-Chi Kuo's latest supply chain assessment suggests Apple's first foldable iPhone could launch later than the rest of the iPhone 18 family. Kuo estimates total assembly shipments of 7 million to 8 million units in the second half of 2026, with third-quarter volumes projected at just 500,000 to 1 million units. This compares unfavorably to the estimated 20 million to 22 million iPhone 18 Pro and Pro Max units expected in the same period.

Kuo drew a parallel to the 2017 iPhone X rollout, suggesting Apple may unveil the foldable device alongside other new models but delay preorders and retail availability by several weeks due to manufacturing constraints.

Technical Indicators and Key Levels

From a technical standpoint, Apple remains in a well-defined uptrend, trading 5.8% above its 20-day and 50-day moving averages. The stock is also 12.5% above its 100-day moving average and 15% above its 200-day moving average. A golden cross established in September 2025, when the 50-day moving average crossed above the 200-day, continues to provide a longer-term constructive backdrop.

The MACD is above its signal line with a positive histogram, indicating buyers are reasserting themselves after a recent pullback. Key resistance sits near $317.50 in the 52-week high zone, while $287.50 represents the next meaningful support level below current prices.