[Digital Today reporter Jinju Hong (홍진주)] Apple's plan to source Chinese-made memory chips, which it considered to address a memory shortage, is effectively losing steam. U.S. regulatory risks toward China and the suppliers' ability to deliver have emerged as obstacles.

On Aug. 11 local time, IT outlet 9to5Mac reported that Apple has been considering sourcing RAM from Chinese memory makers CXMT and YMTC as one way to ease the memory shortage.

Deals with the two companies are not currently legally banned outright. However, Apple's options are constrained by the significant political burden of doing business with Chinese companies on the U.S. Defense Department blacklist.

In particular, the report raised the possibility of additional problems in Apple's relations with the U.S. government if Chinese-made memory chips are installed in iPhones. Concerns also emerged that use of such devices could be restricted for some or all federal employees.

Apple is known to have requested permission from the Trump administration in June to buy Chinese-made memory chips. Expectations were low even then that it would be approved, but factors have recently emerged that further reduce the feasibility of the plan.

The first is the U.S. regulatory environment. Buying memory chips from CXMT and YMTC is not currently defined as immediately illegal, but the possibility remains that the U.S. government could tighten rules on Chinese memory makers in the future.

For Apple, the fact that the transactions are currently legal makes it difficult to pursue long-term supply contracts. Including suppliers with high regulatory uncertainty in the supply chain for core iPhone components could force it to revise procurement plans again if policy changes.

The second hurdle is supply capacity. Doubts are growing over whether CXMT can handle the scale of orders Apple requires. Apple needs large volumes to resolve the shortage, and if Chinese suppliers have not secured enough production capacity, the plan would be hard to use as a practical alternative even if regulatory issues are resolved.

In the end, Apple's China memory sourcing card is blocked simultaneously by two different barriers: U.S. regulatory risk and Chinese suppliers' production capacity.

From the start, the option was viewed as a limited alternative for resolving Apple's memory shortage. But an analysis said that reflecting recent conditions, the chances have fallen further. The outlet also revised its assessment from a "low-probability solution" to "extremely unlikely."

Apple's review of Chinese memory makers stems from a global memory supply shortage. As demand rises for electronic devices including iPhones and memory demand surges around AI data centres, competition for output from major memory makers is also intensifying.

Apple needs to secure stable memory supply lines while minimising cost increases. But using Chinese suppliers would require it to take on the geopolitical variable of U.S. technology controls on China.

For companies targeting global markets like Apple, it is necessary to consider not only component prices and production volumes but also government regulations and supply chain stability. That is why sourcing Chinese memory goes beyond a simple purchase contract and is intertwined with U.S.-China technology rivalry.

As a result, it has become more likely that Apple will need to find other alternatives, such as securing memory supply lines outside China or expanding contracts with existing suppliers.

Key questions going forward are how far the U.S. government will actually tighten regulations on Chinese memory makers including CXMT and YMTC, and what new supply chain strategy Apple will present to respond to surging memory demand. If the current trend continues, the China memory sourcing option Apple reviewed appears to be moving further away from a realistic solution to its memory shortage.