Apple lobbies US to buy Chinese-made memory chips
What's the story
Apple is in talks with two Chinese semiconductor manufacturers, ChangXin Memory Technologies (CXMT) and Yangtze Memory Technologies (YMTC), to buy memory chips. The move comes as part of Apple's strategy to mitigate the impact of a global memory shortage that has forced the tech giant to hike prices across its product range. The negotiations are still ongoing and no final decision has been made yet, according to a Bloomberg report.
Lobbying attempts
Apple lobbying Trump administration
Apple CEO Tim Cook has reportedly lobbied Trump administration officials, including Treasury Secretary Scott Bessent, to mitigate any political fallout from a possible deal with CXMT and YMTC. Both companies are on a recently updated Pentagon blacklist of Chinese entities that the US believes supports Beijing's military. Although Apple doesn't need formal US approval to buy chips from these companies, it could face backlash from national security hawks amid rising tensions between the US and China over advanced technology.
Legislative opposition
US lawmakers oppose potential deal
US lawmakers who favor a tough stance toward China, including House Foreign Affairs Committee Chair Brian Mast, have already expressed their opposition to Apple's potential decision to source memory chips from CXMT and YMTC. "CXMT and YMTC are Chinese military companies fueling the Chinese Communist Party's military modernisation and pursuit of AI dominance," Mast said.
Price adjustments
Price hike for Apple products
The Pentagon's blacklist doesn't have immediate legal consequences but is increasingly being used by the US to limit companies' ability to contract with American military or receive research funding. Last week, Apple announced a price hike for all Macs, iPads, home devices, and the Vision Pro. The company attributed the increase to cost escalations due to the memory chip shortage.
Supply chain expansion
Expanding supplier network
The move to source chips from CXMT and YMTC would expand Apple's list of memory suppliers to five. Currently, the company sources its memory needs from South Korean giants Samsung Electronics and SK Hynix, as well as US-based Micron Technology. However, these companies have struggled to keep up with demand and have announced plans to expand production lines for AI data centers.