ChangXin Memory Technologies (CXMT) expelled engineers linked to Huawei from its Hefei R&D facility in June 2026 following a pricing dispute.
The relationship between China’s semiconductor giants has shifted from strategic cooperation to a raw power struggle. For months, ChangXin Memory Technologies (CXMT) hiked prices for Huawei, refusing to grant relief despite requests from the smartphone maker to lower escalating costs. This tension peaked in June when CXMT ordered a group of engineers from SiCarrier—a chipmaking-equipment vendor with deep strategic ties to Huawei—to immediately leave the factory floor of CXMT’s core research and development zone in Hefei, Anhui province.
The engineers had been working in cleanrooms assisting with equipment maintenance. According to reporting from Reuters, executives at SiCarrier concluded the eviction was the direct result of the pricing standoff. While the companies continue to do business, the engineers have not been permitted back into the R&D zone.
The AI Boom and the DRAM Pricing Shift
Memory chips were once a low-margin business where customers like Apple dictated prices. That dynamic has inverted. The global buildout of AI data centers has created an insatiable demand for DRAM, transforming these components into some of the most sought-after products in the world.
This scarcity has allowed CXMT and its flash-memory counterpart, Yangtze Memory Technologies Corp (YMTC), to move from relying on government subsidies to dictating prices and picking their clients. In some instances, these Chinese firms are charging more than their larger South Korean rivals, Samsung and SK Hynix, because buyers are desperate for supply.
The financial stakes of this newfound leverage are significant. CXMT recently signed a five-year agreement with ByteDance, the owner of TikTok, valued at more than $7 billion.
Apple’s Supply Strategy and the Entity List
The shift in market power is not only affecting domestic Chinese firms. Apple has reportedly sought to reduce its DRAM supply risk by adding CXMT into its fold. To maintain a competitive edge, CXMT is attempting to outpace rivals in the DDR6 space before it reaches commercialization.
However, this commercial expansion is colliding with U.S. national security policy. Entity List. While a U.S. interagency committee approved adding CXMT to the trade blacklist last year, the Commerce Department has so far held off on the designation.
Washington’s Conflict over ‘Twin Stars’ Restrictions
The Pentagon has already designated both CXMT and YMTC as Chinese military companies, citing their roles in China’s military-civil fusion strategy—a claim both firms deny. YMTC is already on the Entity List, which restricts its access to U.S. software and tools essential for memory-chip production.
The U.S. government remains divided on how to handle the “twin stars” of Chinese memory. While Micron has pushed lawmakers to enact further restrictions on their access to chipmaking equipment, the Trump administration is split on whether to intensify the crackdown.
Strategic Realignment in the Semiconductor Chain
The conflict between CXMT and Huawei reveals a critical fracture in the expected unity of Chinese firms facing U.S. export controls. Rather than forming a cohesive front to bypass trade bans, CXMT is utilizing its market position to maximize profit at the expense of its domestic partners.
This behavior reflects a broader trend where the “AI boom” has decoupled the interests of chip designers and memory manufacturers. When supply is the primary bottleneck, the entity controlling the fabrication—in this case, CXMT—holds the leverage, regardless of the strategic importance of the client.
The Path Toward Public Listings
Despite the geopolitical friction and the internal clashes with partners like Huawei, the trajectory for China’s memory giants remains focused on growth. Both CXMT and YMTC are continuing their march toward blockbuster IPOs.
The ability of these firms to maintain high pricing and secure massive contracts, such as the $7 billion ByteDance deal, suggests that their market power currently outweighs the deterrent of U.S. scrutiny. For Huawei, the inability to secure pricing relief from a domestic supplier underscores a new vulnerability: in the era of AI-driven shortages, domestic alignment is secondary to the laws of supply and demand.
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