Apple Tests Chinese-Made Chips for New iPhones Amid Worsening Supply Crisis

Apple is testing memory chips from Chinese company CXMT across various product lines, including the iPhone and MacBook. The strategy is being pursued to address a component shortage crisis triggered by surging demand for artificial intelligence (AI), according to a Wall Street Journal report.

Apple has held preliminary talks with CXMT, China’s largest chipmaker by market value, regarding component supply, with the aim of using them in a number of devices sold in China, the report said, citing sources familiar with the matter.

Reuters could not immediately verify the report independently. Apple and CXMT have also not responded to Reuters’ requests for confirmation.

Reuters previously reported exclusively that CXMT was considering building a second memory chip plant in Beijing to boost production capacity.

Laptop makers such as HP and Acer have also begun using memory chips from CXMT in devices sold outside the United States to ease supply shortages, the newspaper report added.

Amid the global memory chip shortage crisis battering the smartphone industry, Apple has still managed to post positive performance in the second quarter (Q2) of 2026.

A recent Counterpoint report noted that iPhone’s market share still managed to grow 3% to 20% year-on-year (YoY), while the global handset industry as a whole slumped 11% YoY.

Nevertheless, Apple’s stellar performance may not last long. The Cupertino-based giant projects sales growth in the quarter ending September will be slower than Wall Street’s target.

In a conference call with analysts, Apple CEO Tim Cook stressed that the subdued projection is purely due to supply issues, not a lack of market demand.

“We are seeing very significant supply constraints right now with very limited supply chain flexibility to address them,” Tim Cook said, as quoted by Reuters.

At the same time, Apple CFO Kevan Parekh revealed that the company’s revenue is expected to grow only 9% to 11% YoY. This figure is below Wall Street’s expectation of 12% growth, according to LSEG data. Meanwhile, revenue from the iPhone series is projected to grow in the mid-single digits, below the consensus target of 17.6%.