What Bank of America Really Thinks About Apple’s Pursuit of Chinese DRAM from CXMT

When Apple was reported to be lobbying the Trump administration for approval to buy DRAM chips from ChangXin Memory Technologies (CXMT) — a Chinese manufacturer on the Pentagon’s blacklist — many assumed it was a cost-cutting move ^ELI. Bank of America’s (BofA) published research tells a more nuanced story: Apple is not hunting for bargains; it is scrambling for survival in an AI-driven memory supercycle that has turned the component market upside down.

Here is what BofA analyst Wamsi Mohan and his team have actually said about Apple’s CXMT pursuit, the memory market dynamics behind it, and what it means for consumers and investors.

BofA’s View: Apple’s Motive Is Supply Security, Not Cost

Critically, BofA has not issued a dedicated note analyzing Apple’s specific motive for pursuing CXMT (unlike analysts such as Ming-Chi Kuo, who explicitly argues the driver is supply security ^NFI). Instead, BofA’s published research addresses the consequences of the memory cost surge that forced Apple’s hand, and the broader market dynamics.

Key Conclusions from BofA on Apple’s Position

• Memory costs are the primary near-term earnings risk. BofA initially flagged that escalating memory costs presented significant earnings risks for PC manufacturers, though the effect on Apple was seen as “modest” ^F. By June 2026, the cost pressure had become severe enough that Apple was forced to act, lobbying for CXMT access and raising prices on iPads and MacBooks ^EL.
• Apple is using pricing power to offset cost inflation. BofA views Apple’s price increases on iPads and MacBooks (announced June 25, 2026) as a favorable demonstration of pricing power. Mohan reiterated a Buy rating and $380 price target on Apple, noting that price increases could “offset higher memory costs” ^EE.
• Premium iPhones could see $100+ price hikes. In a June 18 note, BofA warned that higher-end iPhone models may face $100+ price increases to counter escalating memory costs ^SY.
• Revenue forecast revised upward despite cost pressure. BofA raised its FY2026 revenue forecast for Apple to $469.8 billion, citing the resilience of Apple’s services segment partially offsetting product headwinds ^MY.
• Memory cost as a share of iPhone BOM is exploding. A JPMorgan analysis cited by the Financial Times and noted by BofA projects memory could account for as much as 45% of an iPhone’s component costs by 2027, up from ~10% today ^A. BofA’s Mohan noted the decision to absorb or pass through costs will be a key strategic choice for new CEO John Ternus ^A.

Caveat: The specific question of why Apple is pursuing CXMT has been analyzed in detail by Ming-Chi Kuo (TF International Securities), who argues the motive is supply security, not cost — driven by a widening global memory supply gap through 2027 ^NF. BofA’s notes focus more on the pricing and earnings impact than on parsing Apple’s motive specifically.

The Broader Memory Market: BofA’s Analysis of Pricing, Supply, and Structure

BofA’s research goes deep on the macro forces reshaping the memory industry — and they are stark.

Industry Pricing Trends

• BofA projected a 14% increase in DRAM prices and a >140% surge in NAND prices for 2026 ^F.
• The bank identified a structural supply shortage: restrictions on capital expenditure, bottlenecks in advanced packaging, and power limitations are keeping memory pricing elevated as AI demand continues to grow through 2026 ^I.
• BofA forecasts persistent DRAM shortages through 2026, with contract prices already up ~100% year-to-date and potential for further upside — some contracts could rise another 50% in six months ^I.
• The bank raised its price target for Micron from $500 to $950, reflecting an “increasing belief in the long-term demand for high-performance memory chips utilized in AI servers and data centers” ^I.
• BofA described the memory industry as undergoing a “chip foundry transformation” — reduced cyclicality, stabilized pricing, and continuously improving profit margins ^N. The bank defines 2026 as a “supercycle similar to the boom of the 1990s,” forecasting global DRAM revenue to surge by 51% and NAND by 45% year-over-year ^N.

Supplier Concentration and CXMT’s Limited Role

• The global DRAM market is dominated by three suppliers: Samsung Electronics, SK hynix, and Micron. CXMT currently holds only about 8% of global DRAM market share ^Y.
• Chinese memory suppliers like CXMT can undercut incumbents by up to 30% depending on the contract ^Y. While this pricing pressure threatens the oligopoly’s margins in theory, CXMT’s output is simply too small to fill Apple’s needs or meaningfully reshape the market ^LY.
• BofA noted that SK hynix’s dominance in HBM4/4e and HBM3e makes it the preferred supplier for NVIDIA, Google, and OpenAI — further diverting mainstream DRAM supply away from consumer electronics ^I. SK hynix holds an estimated 62% of the HBM market share ^I.
• BofA analysts project the 2026 HBM market will reach $54.6 billion, a 58% increase from the previous year ^N.

The Root Cause: AI Infrastructure Spending

• BofA explicitly links the AI infrastructure boom to Apple’s predicament: “The surge in demand for artificial intelligence infrastructure is pushing up the cost of memory and storage chips, key components in phones, tablets, and computers” ^N.
• AI servers consume vast quantities of DRAM (especially HBM), pulling supply away from the consumer market and pushing up prices across all memory categories ^MF.
• The bank’s raised price target for Micron signals that memory suppliers — not buyers — hold the leverage in this cycle ^I.
• NVIDIA is displacing Apple as the dominant DRAM buyer in the industry ^S, and Apple is structurally disadvantaged because it books memory as COGS (not capex), unlike cloud peers AWS, Azure, and GCP who depreciate memory costs over time ^S.

Summary: BofA’s Key Positions

Factor	BofA’s View	Source
Apple stock rating	Buy, PT $380	EN
Apple’s response to memory costs	Raise prices (pricing power); premium iPhones may add $100+	ELS
DRAM price forecast 2026	+14%; shortages persist through 2026; contract prices up ~100% YTD	FI
NAND price forecast 2026	>+140% for 2026	F
Root cause of shortages	AI infrastructure demand pulling supply from consumer devices	YNI
Supplier concentration	Oligopoly intact; CXMT’s 8% share is too small to fix Apple’s problem	TYL
Memory industry structure	Becoming “chip foundry-like” — less cyclical, higher margins	N
HBM market 2026 estimate	$54.6 billion, +58% YoY	N
Apple FY2026 revenue forecast	$469.8 billion (revised upward)	M

The Bottom Line

BofA’s research paints a clear picture: Apple’s CXMT lobbying is a symptom of an AI-driven memory supercycle that has shifted leverage from buyers to suppliers. With limited output and geopolitical risk, CXMT alone cannot solve Apple’s problem. Instead, BofA sees Apple using its pricing power to pass costs to consumers — and maintains a bullish stance on the stock. For investors and consumers alike, the key takeaway is that memory costs are not a transitory blip; they are a structural shift that will define Apple’s product pricing and margins for at least the next 18 months.

Disclosure: This article synthesizes published research from Bank of America Securities, analyst notes from Wamsi Mohan and others, and publicly available market data. It is not investment advice.