Apple is quietly testing memory chips from Chinese manufacturer CXMT for possible use in iPhones and MacBooks, according to a Wall Street Journal report published Sunday.

Apple Inc. (AAPL) is in early talks with CXMT about a possible supply arrangement, but it is waiting for White House approval before any deal can move forward.

Apple's interest in CXMT is tied to cost. Rising memory prices, driven by heavy demand from artificial intelligence data centers and AI-enabled devices that require substantially more DRAM and NAND than traditional computing workloads, have forced the company to raise product prices globally. A Chinese supplier could give Apple more leverage on pricing.

Federal export rules, however, sharply limit how far the relationship can go. U.S. companies are prohibited from sharing technology with CXMT, which prevents the type of custom chip development Apple typically pursues with suppliers such as Micron, SK Hynix, and Samsung. The restrictions are part of a broader U.S. effort dating back several years to limit China's advancement in semiconductor manufacturing.

What Apple can do, according to Kevin Wolf, a lawyer at Akin Gump who advises on export controls, is buy CXMT's off-the-shelf products and negotiate on price.

CXMT, China's largest domestic DRAM producer, recently listed on the Shanghai stock exchange and is now mainland China's most valuable listed company. Its second-quarter revenue was more than eight times higher than a year earlier.

The Pentagon has placed CXMT on a list of companies it says have ties to China's military. Some U.S. policymakers are concerned that orders from large American firms could provide CXMT with capital and indirect access to U.S. expertise.

There is also a supply constraint. CXMT has already maxed out its production capacity for this year and has limited room for new international customers. HP and Acer have already secured limited volumes and are working to lock in larger supplies for 2027.

CXMT chip prices are broadly in line with Micron, SK Hynix, and Samsung, and at times higher because of tight supply and higher production costs.

Apple's Recent Earnings

Apple stock opened at $313.33 on Friday. The company reported quarterly earnings per share of $2.02, beating the consensus estimate of $1.89 by $0.13. Revenue totaled $109.42 billion, up 16.4% year over year and above the analyst estimate of $109.04 billion.

The company has a market capitalization of $4.57 trillion, a price-to-earnings ratio of 35.93, and a 12-month trading range of $219.25 to $344.57.

Institutional investors hold 67.73% of the stock. Analyst consensus currently stands at "Moderate Buy" with a $330.44 price target.

JPMorgan cut its price target from $345 to $340 while keeping an "overweight" rating. Phillip Securities downgraded the stock to "moderate sell," and China Renaissance lowered its rating to "hold" with a $280 target.

Leadership Change Ahead

Tim Cook is set to step down in September, with Apple veteran John Ternus lined up to become chief executive officer. Ternus currently serves as senior vice president of hardware engineering and has overseen the development of key product lines including iPhone, iPad, and Mac hardware. Cook said Ternus is the right person for the role.

Apple also announced a quarterly dividend of $0.27 per share, payable August 13, with a record date of August 10.

Analysts expect full-year earnings per share of $8.76 for the current fiscal year.