Key facts
- US senators have set a deadline of August 21, 2026, for Apple to cease sourcing chips from Chinese companies CXMT and YMTC.
- Both CXMT and YMTC are on the Pentagon's list of Chinese companies supporting Beijing's military.
- YMTC is also on a Commerce Department blacklist restricting technology transfers.
- Senators are concerned about potential intellectual property sharing with these Chinese firms.
- Apple's stock fell significantly following warnings of supply constraints impacting growth.
A bipartisan group of U.S. senators has issued a demand to Apple CEO Tim Cook, setting a deadline of August 21, 2026, for the tech giant to stop sourcing chips from Chinese manufacturers ChangXin Memory Technologies (CXMT) and Yangtze Memory Technologies Co. (YMTC). The senators cited national security concerns, noting that both companies are on the Pentagon's list for supporting China's military, and YMTC is also subject to a Commerce Department blacklist.
Concerns were raised about the potential for intellectual property sharing with these firms, even for China-exclusive supply arrangements. This demand comes as the technology sector faces broader supply constraints for advanced chips and memory, driven by AI demand, which has increased costs and prolonged supply-chain bottlenecks.
Apple's stock experienced a significant drop, shedding approximately $361.6 billion in market value, as the company warned that supply constraints would impact growth. While iPhone sales showed strong growth in the June quarter, investors are focused on the company's ability to manage upcoming price increases without significantly denting demand, especially given the ongoing supply challenges.