New Apple CEO Faces Pressure to Reconsider Chinese Chip Supplier
Apple's new CEO, John Ternus, faces immediate pressure from U.S. policymakers and analysts to abandon a memory chip supplier based in China—CXMT—that has contributed significantly to the company’s margin compression due to rising DRAM prices. This issue was previously defended by outgoing CEO Tim Cook during Apple’s July earnings call, where he cited extreme inflation in memory costs as a key factor behind iPhone price increases. The potential shift could benefit U.S.-based chipmakers like Qualcomm and Nvidia, which have already demonstrated strategies for reducing reliance on Chinese supply chains. Meanwhile, Apple has shown commitment to domestic manufacturing by signing a $30 billion multi-year agreement with Broadcom under its U.S. manufacturing initiative. The timing of this debate comes as Apple approaches a historic market cap milestone above $5 trillion. Analysts are closely watching how Ternus navigates the geopolitical and financial implications, particularly given that more than 100% of Apple’s gross margin compression was attributed to memory costs in recent quarters.
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Topics: Apple CEO Transition China DRAM Supplier CXMT Memory Chips U.S. Manufacturing Agreement