Apple devices could face AI-driven memory shortage by 2027, says analyst

Apple's reported efforts to secure memory chips from Chinese supplier ChangXin Memory Technologies (CXMT) may be rooted in a looming global supply crunch rather than solely geopolitical considerations, according to TF International Securities analyst Ming-Chi Kuo.

We have previously reported that the iPhone maker has reportedly reached out to the Trump administration for approval to source memory chips from Chinese manufacturer ChangXin Memory Technologies (CXMT), which is listed on a Pentagon blacklist, in an effort to manage escalating chip costs.

After this report, in a post on X, the well-known Apple analyst, Ming-chi Kuo, argued that an increasingly severe imbalance between memory supply and demand is the key factor shaping Apple's procurement strategy. While recent reports have suggested the White House could seek to restrict CXMT by placing the company on the US Entity List, Kuo believes the more immediate concern for Apple is ensuring access to sufficient memory as demand accelerates.

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His assessment comes at a time when artificial intelligence is reshaping the semiconductor industry, with memory manufacturers increasingly redirecting production capacity towards AI infrastructure and data centre customers, leaving consumer electronics makers facing tighter supply.

AI boom expected to tighten memory availability

According to Kuo's latest industry research, the supply outlook for memory used in smartphones, tablets and other consumer devices is expected to worsen over the next two years.

He said that between 15 per cent and 20 per cent of memory production currently serving consumer electronics in 2026 is expected to shift towards data centre applications in 2027, with the possibility of further increases afterwards. The transition reflects surging demand for AI servers, which require significantly larger quantities of advanced memory than traditional consumer products.

Kuo also suggested Apple's own internal forecasts for next-generation processors may need to be revised because of these constraints. He estimates that Apple's planned procurement of LPDDR memory for devices using its A20 chips during the second half of 2026 and the first half of 2027 could end up falling around 10 per cent short of the company's original expectations, although he noted that some of the gap could also be explained by Apple reducing previously ambitious orders.

The analyst argued that these pressures make securing additional memory suppliers increasingly important, particularly as Apple prepares future generations of iPhones and other products expected to include more AI-driven features.

Why CXMT matters to Apple

Kuo said Apple's interest in CXMT should be viewed in the context of this broader supply challenge rather than as a simple cost-cutting exercise.

He pointed to CXMT's own prospectus, which indicates that the company does not currently have enough production capacity to meet demand within China's domestic market. Even if Apple succeeds in obtaining memory from the manufacturer, Kuo believes it would do little to ease the wider industry shortage or significantly reduce component costs.

Instead, adding CXMT to Apple's supplier network could provide another source of DRAM at a time when supply constraints are expected to intensify. Kuo contrasted the situation with Apple's previous evaluation of Yangtze Memory Technologies (YMTC) in 2022. While that effort was largely associated with reducing NAND flash costs, he said the company's current engagement with CXMT is more closely linked to managing future supply risks in the DRAM market.

The analyst also suggested that the timing of Apple's reported efforts may be influenced by broader geopolitical considerations. Kuo noted that Chief Executive Tim Cook remains one of the few technology leaders able to maintain working relationships with both Washington and Beijing. He argued that Apple may see an opportunity to explore cooperation with CXMT before any future US restrictions potentially complicate such arrangements.

Even if those discussions ultimately fail to result in a supply agreement, Kuo believes Apple could still demonstrate to investors and consumers that it has actively sought solutions to mitigate future memory shortages. According to the analyst, such efforts may help explain any future price increases or extended product delivery times should supply constraints become more severe.

While neither Apple nor CXMT has publicly commented on the analyst's claims, Kuo's remarks highlight how the rapid expansion of AI infrastructure is beginning to reshape supply chains well beyond the data centre, with smartphone makers increasingly competing for the same semiconductor resources powering the next wave of artificial intelligence.