Apple's Bid to Use Chinese Chipmaker as Leverage Backfires

[Biro]

the time to buy new apple products was earlier this year. I’ve got what I need across the lineup. I’m going to just sit tight for a few years and wait for the RAM supply crunch to end.

Same here. I would have updated my M2 Max Mac Studio as well, except I couldn’t get an M5 Max version from Apple. At least the Mac Studio still works and does everything I ask of it. I’m sure it’ll be fine for another two or three years while the rest of my Apple gear is set up for five to seven years if necessary.

 

[SlightWince]

I'll say it again... **** AI.

 

[Wx_Man]

That's what you get Apple for relying on Chinese goods they screw you over every time build in the united states.

Yep. Tim Apple’s job under Steve Jobs was to make China Apple’s manufacturing core. So much so that Apple literally trained most of what became the tech workforce of China that now not only competes against America but now gives Apple the back hand when looking for cheaper prices like memory. Thanks Tim Apple.

 

[mozumder]

Do you think you’re the first person to have this idea? 😂

You don't have to cry because you didn't think of it first like I did.

 

[Biro]

Its always about price first. Apple can get everything they want if they spend the money, including buying memory from others. The only logical reason they don't is because they don't want ot spend the money necessary.

The problem is that the memory makers have maxed out their capacity to meet the demands of the AI industry. Your argument that Apple can get the memory it wants if it simply pays for it may be true as an academic matter. But it doesn’t hold up in the real world as it exists right now.

Assuming that Apple could get the Samsung, SK Hynix and Micron et al to make the memory it wants (and at this point, I don’t think they can), the money it would have to pay would force prices of devices so high that consumers wouldn’t buy them. And anyone (I’m not saying you’re one of them) who thinks Apple should just sing “Kumbaya” and eat the loss is dreaming. Even I don’t think Apple should do that and Apple knows better.

 

[StuBeck]

At the time, he was quoted as simply saying "those jobs aren't coming back."

He elaborated more in his biography. I found one article that gives more background: https://www.pulitzer.org/winners/staff-74

There's no direct link, but it's the top link on that page with a title about iPhone jobs.

Basically it boils down to the general erosion of the middle class in America, with people either over or under educated for these types of jobs.

And the supply chain, in that China has built literal megacities around manufacturing in a way that seems implausible if not impossible in America.

And the fact that the Chinese government did make those investments at the time, and it has paid off insurmountably. The US government doesn't seem able to make effective investments.

Labor is apparently not as big a part of it as it seems, though China has the advantage there too in sheer manpower willing/able to be forced into doing the kind of work Americans just won't do (12 hour days living in dormitories.)

The US government could have spent the last 20 years making wise investments in education and manufacturing like the Chinese did, but they didn't. As terrible as some of those jobs sound, there are still plenty of people in America who would take them because the job market here has gotten awful, due to many of these very trends.

Got it, and yeah I think there is some reality to that. With the war on education we've had the last 20 years though, we aren't getting education for the people who could use it at the scale we need. We still essentially have the best higher education, but have ensured that we don't make it seem obtainable for many.

There are certain manufacturing jobs I can see happening in the US, with a gross simplification being final assembly of a product for example. The problem is this would (again overly simplfied) be easiest to handle with massive tax breaks...which doesn't work when the companies are already paying far less than they should.

 

[haemolysis]

It’s funny how there’s a back and forth of people arguing that it is, or is not, worth it for Apple to build a RAM fab.

And I feel reality may be the worst option of all:

It does indeed make sense for Apple to build a RAM fab, but not to supply their products. That’s wasted margin. They should make RAM so they too can sell it for AI.

 

[StuBeck]

The problem is that the memory makers have maxed out their capacity to meet the demands of the AI industry. Your argument that Apple can get the memory it wants if it simply pays for it may be true as an academic matter. But it doesn’t hold up in the real world as it exists right now.

Assuming that Apple could get the Samsung, Hynix et al to make the memory it needs (and at this point, I don’t think they can), it would have to pay so much that it would force prices of devices so high that consumers wouldn’t pay for them. And anyone (I’m not saying you’re one of them) who thinks Apple should sing “Kumbaya” and just eat the loss is dreaming. Even I don’t think Apple should do that and Apple knows better.

Yes, I'm aware of the capacity issue. My comment is that the core issue is price. Apple could raise prices if they wanted to get the capacity they feel they need.

 

[Biro]

It’s funny how there’s a back and forth of people arguing that it is, or is not, worth it for Apple to build a RAM fab.

And I feel reality may be the worst option of all:

It does indeed make sense for Apple to build a RAM fab, but not to supply their products. That’s wasted margin. They should make RAM so they too can sell it for AI.

By the time Apple (or anyone else) can get a fab built, the AI crisis will be over.

 

[Zwhaler]

I think this article mischaracterizes Apple's main reason for approaching Chinese RAM makers - it wasn't to put price pressure on Samsung and Hynix (and Micron), but to simply get enough memory! Another article elsewhere pointed out that those manufacturers have already run out of capacity until 2027!

Price is no doubt an equal factor or secondary but significant at the very least. If price didn’t matter then Apple would simply pay the most to cut the line.

 

[Omega Mac]

It takes several years to build these facilities, and the minerals required still need to be imported. That's why the Trump Regime's idea is dumb.

Some days it's seems everyone hates Trump because the media have told them to hate him since 2015 but think about the issue, why did China / Asia etc. even bother in the first place if it's just so awkward and hard?

Trumps been talking about this stuff for decades, he doesn't seem much different to what Ross Perot was talking about when it was happening in real time in a most destructive manner for American workers in the 90's onwards, the giving away of American built innovation and tech to the likes of China (initially Japan first) seemed rightly nuts, now one of the two has got the big job, and are being true to self.

I don't understand why a country, that happens to be the largest economy in the world and the rest, want to throw that all away and have a leader that hates it country as a matter of priority, which does seem to be the fashion across the western countries these days (insanely nuts), but it's like isn't that the minimal requirement for a leader, to love the thing they are their to protect and uphold?

Imagine if Jobs hated Tech... it make no sense to want anything other than the best in the top job, like there is a lot of hope for Ternus, a hardware guy, Trump is an American guy, etc. etc. I digress.

Meanwhile there is still some of that can do spirit out there afterall, if anyone can Apple can/could and should - https://veduis.com/blog/how-to-create-your-own-ddr5-ram/

A ram innovation is pending too, has to be, someone in a garage somewhere is going to do something that will change everything you're gonna love! 😉

Honestly wouldn't be surprised if the silicon ARM of Apple have a project trying to solve this problem.

 

[Javah]

I think this article mischaracterizes Apple's main reason for approaching Chinese RAM makers - it wasn't to put price pressure on Samsung and Hynix (and Micron), but to simply get enough memory! Another article elsewhere pointed out that those manufacturers have already run out of capacity until 2027!

It is merely to get placement in their production pipeline. Now they have to wait for other higher paying clients. It's not the price of memory chips but the price of getting them produced. Other clients are just paying more to reserve production places for their memory chips.

 

[Populus]

Samsung and SK Hynix face less pressure to lower their own prices, at the same time they're shifting production toward high-bandwidth memory for AI servers and tightening the broader DRAM supply.

I know this might sound like a dumb question but… if the production of DRAM is more and more constrained, and the production of HBM is rising, couldn’t that type of memory be used for most domestic devices? Maybe not for an iPhone A20 chip, but for an M6 Mac chip this is not only viable, but also carries a qualitative jump in AI performance…

As I said, I’m quite ignorant and maybe if the big tech corporations aren’t using that type of memory is for a reason. Maybe it’s significantly more expensive…

 

[expensiveram]

But remember there's a group of people in this forum that refuses to believe there is any such RAM shortage.

Yeah the conspiracy theories about “hiding memory under the pillow” are wild.

Chinese memory makers are five years behind everyone else in terms of memory speed and scale. They’re not going to bridge that gap overnight.

For 30 years we see people online say “Russia and China wiLL hAve theiR oWn CPU, operating system and GpUs soon”.

People who don’t know how hard semiconductors are to developer and the level of expertise needed are wild.

Even if Samsung, Hynix and TSMC scale production 5X in the next five years prices still aren’t going to come down much because the demand for memory will still be higher than the supply can catch up with.

AI models people can download are doubling in size every year and cloud gaming is going to need more and more VRAM and drive space.

 

[TruthAboveAllElse]

Apple’s plan didn't “backfire,” it just didn't work.

That’s what I was thinking. I don’t see where it backfired in the article.

 

[MiamiFL]

By the time Apple (or anyone else) can get a fab built, the AI crisis will be over.

Not a chance. AI and datacenter demand isn't going to suddenly drop off, it's only going to keep ramping up. Thinking it's a passing fad is like those that claimed the internet was a passing fad.

 

[MiamiFL]

Some days it's seems everyone hates Trump because the media have told them to hate him since 2015 but think about the issue, why did China / Asia etc. even bother in the first place if it's just so awkward and hard?

Trumps been talking about this stuff for decades, he doesn't seem much different to what Ross Perot was talking about when it was happening in real time in a most destructive manner for American workers in the 90's onwards, the giving away of American built innovation and tech to the likes of China (initially Japan first) seemed rightly nuts, now one of the two has got the big job, and are being true to self.

I don't understand why a country, that happens to be the largest economy in the world and the rest, want to throw that all away and have a leader that hates it country as a matter of priority, which does seem to be the fashion across the western countries these days (insanely nuts), but it's like isn't that the minimal requirement for a leader, to love the thing they are their to protect and uphold?

Imagine if Jobs hated Tech... it make no sense to want anything other than the best in the top job, like there is a lot of hope for Ternus, a hardware guy, Trump is an American guy, etc. etc. I digress.

Meanwhile there is still some of that can do spirit out there afterall, if anyone can Apple can/could and should - https://veduis.com/blog/how-to-create-your-own-ddr5-ram/

A ram innovation is pending too, has to be, someone in a garage somewhere is going to do something that will change everything you're gonna love! 😉

Honestly wouldn't be surprised if the silicon ARM of Apple have a project trying to solve this problem.

Trump's worst critics were begging him to run for president when he was an old school Democrat (old school Dems are now Republicans) but as soon as he ran as a Republican, they got a bad case of TDS. It's like having a favorite sports figure but if he goes to another team and changes his jersey, he's suddenly hated. Same guy, same abilities but team sports, like politics, aren't known for being logical. By today's standards, Clinton would be a Republican.

 

[Doomtomb]

Apple doesn't have hundreds of billions, afaik, and it would be really stupid for Apple to do so. For one, there's already a heavy-weight DRAM maker in the US - Micron. For another, the whole reason Apple lets TSMC produce all its CPU chips is because it is smart enough to know that it's a very expensive, ongoing endeavor that doesn't make economic sense for them. They simply don't want that anchor around their legs. And if they don't want it for the heart of their devices, it makes even less sense to do it for a commodity like RAM.

As reported by Apple on July 30 for the quarter ended June 27, Page 2, Total current assets (convertible to cash within a year), $150B. Total assets: $383B.

TSMC does not make DRAM, they make logic. I am not calling for Apple to compete with TSMC. A trio of DRAM suppliers, as demonstrated, is not enough to satisfy demand. A single domestic supplier to the entire DRAM market itself is not enough. Apple has the engineers and the means to enter the market and make their own DRAM. I find it difficult to sympathize with companies that complain about supply constraints while refusing to use their considerable resources to help solve them.

 

[matthew12]

Maybe instead Apple could work with some manufacturer to start making RAM in the US. Obviously it wouldn't help with the RAM crisis as it takes forever to get all that stuff set up, but it'll be a bulwark against any future RAM crises, such as China invading Taiwan.

 

[JPack]

I know this might sound like a dumb question but… if the production of DRAM is more and more constrained, and the production of HBM is rising, couldn’t that type of memory be used for most domestic devices? Maybe not for an iPhone A20 chip, but for an M6 Mac chip this is not only viable, but also carries a qualitative jump in AI performance…

As I said, I’m quite ignorant and maybe if the big tech corporations aren’t using that type of memory is for a reason. Maybe it’s significantly more expensive…

No, the situation would be even far worse.

HBM uses roughly 3X the wafers for the same amount of bits compared to conventional DDR5/LPDDR5.

 

[california_kid]

If money were the only barrier, there would be 10+ DRAM manufacturers today. The reality is that DRAM circuit design, fabrication processes, packaging, testing, and manufacturing are all protected by decades of intellectual property and know-how. It would take years just to produce a first-generation chip, assuming a company could acquire, license, or successfully navigate the necessary IP. By the time they reached production, the established DRAM manufacturers would already be another couple of generations ahead.

Alternatively, Apple could acquire a DRAM maker but do we really want a situation where Apple kicks all companies out and only produce for themselves?

 

[Doomtomb]

Maybe instead Apple could work with some manufacturer to start making RAM in the US. Obviously it wouldn't help with the RAM crisis as it takes forever to get all that stuff set up, but it'll be a bulwark against any future RAM crises, such as China invading Taiwan.

The crisis started around November 2025. It would've been premature to act immediately but it's been nearly a year and there's no signs of slowing down. So I'd rather they have acted 6 months ago, but I'll take now as a consolation.

 

[boast]

So interesting that none of these articles ever mention the collusion and price fixing between the big 3 memory manufacturers + ongoing class action lawsuit in California. Only Gamers Nexus covers it.

 

[Biro]

Not a chance. AI and datacenter demand isn't going to suddenly drop off, it's only going to keep ramping up. Thinking it's a passing fad is like those that claimed the internet was a passing fad.

Yes, but while the internet didn’t go away, the tech bubble did burst in 1999-2000 and a lot of companies went bankrupt… leaving a whole lot of excess capacity behind. Capacity that took years to align with demand.

 

[jarman92]

AI and datacenter demand isn't going to suddenly drop off, it's only going to keep ramping up.

It’s effectively guaranteed to drop off—the current pace is obviously unsustainable and there are already signs that the currently planned capacity won’t be needed, at least in the short term.

Thinking it's a passing fad is like those that claimed the internet was a passing fad.

Acknowledging the reality that we’re in a bubble and the frontier companies are way out over their skis isn’t the same as thinking AI is a “passing fad.”