Key facts
- Apple is lobbying the Trump administration to purchase memory chips from Chinese supplier CXMT.
- CXMT is on a Pentagon blacklist due to alleged links with the People's Liberation Army.
- Apple recently increased prices for Macbooks and iPads by approximately 20% due to rising chip costs.
- Soaring demand for AI infrastructure has diverted production of advanced memory chips, tightening supplies of conventional DRAM chips.
- CXMT reported a 700% year-on-year revenue increase in its first quarter.
Apple is reportedly seeking approval from the Trump administration to source memory chips from ChangXin Memory Technologies (CXMT), a Chinese manufacturer that has been blacklisted by the Pentagon. This move comes as the burgeoning AI sector intensifies demand for semiconductors, leading to significant price hikes for conventional DRAM chips used in consumer electronics.
The iPhone maker's reported lobbying effort follows a recent decision to increase prices for Macbooks and iPads by approximately 20%, citing unsustainable surges in memory and storage chip costs. Global technology stocks have also experienced a volatile week, with memory chip shortages contributing to sharp declines in Asian markets, including a nearly 7% drop in South Korea's Kospi index on Friday.
CXMT, founded in 2016, has become a major beneficiary of the current supply squeeze, reporting a more than 700% year-on-year increase in first-quarter revenue. The company is also preparing for a significant listing on the Shanghai stock exchange, aligning with Beijing's strategy to foster domestic semiconductor champions.
However, Apple's potential partnership with CXMT faces political hurdles in Washington. Inclusion on the Pentagon's blacklist, while not an outright ban on purchases, carries substantial political and reputational risks. Furthermore, CXMT's potential inclusion on the Commerce Department's Entity List could necessitate export licenses that are typically denied. Lawmakers, such as John Moolenaar, chair of the House China Committee, have voiced strong opposition, arguing that such a move would exacerbate US dependence on Chinese supply chains for critical technologies.