Apple has actively lobbied against U.S. national security measures, seeking assurances that Chinese chipmaker ChangXin Memory Technologies (CXMT) won't be placed on the Entity List. This corporate intervention comes as the Pentagon designates both CXMT and Yangtze Memory Technologies Corp (YMTC) as Chinese military companies, citing their role in Beijing's military-civil fusion strategy. The Trump administration remains divided on whether to crack down on these firms, a clear sign of elite interests fracturing national resolve.
CXMT, now the world's fourth-biggest memory maker, has dramatically hiked prices for clients like Huawei for months. Its flash-memory counterpart, YMTC, has also gained significant power. The global buildout of AI data centers has transformed memory chips into highly sought-after products, sparking intense battles over pricing and supply. Chinese memory makers now dictate terms, often charging more than established South Korean rivals like Samsung and SK Hynix.
Elite Interests Undermine National Resolve
CXMT this month secured a five-year agreement with ByteDance, TikTok's Chinese owner, valued at over $7 billion. This follows a June agreement with Tencent worth more than $3 billion. The company will make its Shanghai market debut on Monday after an $8.6 billion IPO, having erased a decade of losses in just six months. CXMT booked $7.5 billion in revenue for the first quarter, a staggering 719% increase from a year earlier. YMTC, preparing for its own IPO, aims for a 1 trillion yuan, or $148 billion, valuation target.
These Chinese firms' growing grip on chip supply directly challenges Washington's strategic interests. Despite the Pentagon's designation of CXMT and YMTC as military companies, the Trump administration's internal divisions persist. Apple's lobbying efforts highlight how transnational corporate agendas can override national security concerns. Micron, the main Western competitor, has pushed U.S. lawmakers to enact further restrictions on CXMT and YMTC, including curbing their access to crucial chipmaking equipment, representing a rare voice of domestic industry fighting for its survival.
Beijing's Coherent National Strategy
Both CXMT and YMTC receive substantial backing from the Big Fund, a Chinese state-backed semiconductor investment vehicle. Local and provincial governments, including Anhui for CXMT and Hubei for YMTC, also provide support. Chinese officials explicitly view these companies as strategic infrastructure, central to Beijing's drive for technological self-reliance, according to corporate filings and policy documents. This demonstrates a unified national effort to secure technological sovereignty.
YMTC entered the South Korean market in June, exploiting a gap left by Samsung, SK Hynix, and Micron, which have shifted focus to more advanced chips. Chinese authorities have explicitly instructed CXMT and YMTC to prioritize supply to domestic firms. Furthermore, Chinese state-owned firms are restricted from purchasing from foreign memory makers, a clear policy of economic nationalism. The chipmakers also plan massive manufacturing capacity expansions, with new fabrication plants coming online as soon as 2027. CXMT is building two new plants and discussing a third, aiming to more than double production capacity to over 600,000 wafers per month. If these plans succeed, CXMT's capacity could surpass Micron by 2030.
The Cost of Global Interdependence
Despite their dominance, Chinese memory makers still rely on deep ultraviolet lithography machines from Dutch giant ASML. The Dutch government, under U.S. pressure, has restricted sales of advanced lithography equipment to Chinese companies since 2019, citing potential military applications and the presence of U.S. technology. This reliance exposes the fragility of global supply chains and the leverage foreign powers can exert. However, YMTC, added to the U.S. Entity List four years ago, has already replaced around half of its equipment with domestic machinery, developing new techniques to stack memory layers using less-advanced tools. This shows a determined effort to overcome external constraints and achieve true self-reliance.
Chinese memory chips, once seen as cheaper alternatives, now command higher prices. CXMT has recently charged more than Samsung's approximately $1,240-per-unit price for comparable 64-gigabyte DDR5 server memory modules. Several Chinese electronics and tech firms complained to China's Ministry of Industry and Information Technology this year about these price increases, blaming them for delaying product launches. The ministry responded in April, stating it would crack down on memory-chip hoarding aimed at driving up prices, demonstrating a state-controlled market where national interests supersede pure profit motives.