China's CXMT Plays Hardball — Strengthening Samsung and SK's DRAM Bargaining Power
Apple, which had recently been evaluating China's Changxin Memory Technologies (CXMT) as a new supply-chain source in a bid to cut costs, is understood to be struggling in negotiations to secure further price reductions. Paradoxically, with the cheap-Chinese-component workaround now blocked, Samsung Electronics and SK hynix have been relieved of the burden of shipping commodity DRAM and are concentrating their production lines on high-value AI memory such as high-bandwidth memory (HBM) — creating a market dynamic in which they now hold complete control over global memory pricing power.
◆ "More expensive than Samsung" — CXMT rebuffs Apple as DRAM market leadership flips
According to semiconductor industry sources on the 5th, Apple recently negotiated with CXMT over supply pricing for mobile DRAM including LPDDR5X, seeking to ease manufacturing cost pressure on its next iPhone and smart-device lineups, but was reportedly refused a price cut. CXMT instead held firm at prices equal to or higher than those quoted by Samsung Electronics and SK hynix. In effect, Apple — long a byword for buying power in the finished-goods market — has been stonewalled by a component supplier's hardball pricing.
Behind CXMT's willingness to flatly reject Apple's demands is the wholesale volume sweep by Chinese IT giants such as Huawei and Xiaomi. With Washington's semiconductor sanctions on China still in force, Chinese device makers pursuing domestic self-sufficiency have locked up CXMT's DRAM output in advance through high-priced long-term contracts — leaving CXMT with no reason to bend to an Apple that demands both exacting quality qualification and lower prices. Analysts say the solid captive demand of China's domestic market is providing CXMT with a powerful pricing shield.
The "cross-diversification into cheap Chinese components" playbook favored by Apple and other global device giants for beating down component prices has been rendered useless amid the commodity DRAM shortage. Finished-goods divisions have historically deliberately dangled Chinese panels or memory as bait to pressure affiliates and incumbent suppliers, thereby seizing the upper hand in annual pricing contracts. But as the supply-demand imbalance across the memory market accelerates, the balance of power is seen as having shifted decisively from set makers to memory manufacturers.
◆ Big Tech's cheap workaround closes — the shortage spreads to commodity DRAM
This phenomenon is read as a knock-on effect of the sharp drop in absolute capacity for commodity DRAM (DDR5, LPDDR5X) caused by the buildout of HBM-dedicated production lines throughout the first half. As major memory makers cut wafer input for commodity DRAM and concentrated on HBM packaging processes to meet demand from next-generation AI servers and accelerators, even commodity DRAM prices have surged, entrenching the "memflation" phenomenon. With Chinese memory makers — once viewed as the alternative — now demanding full price as well, Big Tech has lost its detour around rising costs.
The market's read is that this episode is feeding a virtuous cycle delivering record practical windfalls to Korean semiconductor giants Samsung Electronics and SK hynix. Because CXMT is absorbing large volumes of China-focused commodity DRAM, Korean firms have been fully freed from the shipment pressure of clearing low-priced commodity volume and from the associated price-decline risk.
Into the space vacated by commodity DRAM oversupply fears, Samsung Electronics and SK hynix are aggressively pushing forward ultra-high-value AI memory lineups such as HBM4, LPCAMM2 and eSSD. Having reengineered their product mix toward high-value products, the two now hold unrivaled pricing power heading into second-half long-term pricing negotiations with global Big Tech.
"An unusual situation has emerged in which CXMT is holding the price floor and thereby firmly underpinning commodity DRAM pricing as well," one industry official said. "With the commodity DRAM floor intact and Samsung and SK hynix monopolizing leadership in high-value AI memory like HBM4, operating margins and global market control for Korea's semiconductor camp should rise all the more steeply in the second half."