Apple is actively lobbying the Trump administration for clearance to purchase memory chips from ChangXin Memory Technologies (CXMT) and Yangtze Memory Technologies Co. (YMTC), two Chinese companies currently on the Pentagon's blacklist. According to reports from CNBC TV18, the iPhone maker is in negotiations to buy memory components from both companies for use in devices sold in China, with talks ongoing and nothing finalized yet. The lobbying effort includes appeals by CEO Tim Cook to Trump administration officials, including Treasury Secretary Scott Bessent, to help soften the political fallout from any possible deal with the Chinese chipmakers. While Apple doesn't need formal US approval to buy chips from CXMT or YMTC, the company would risk significant blowback from national security hawks at a time of heightened US-China tensions. Some Trump administration officials have expressed objections to giving Apple leeway to add the two Chinese firms to its supply chains.
Both CXMT and YMTC are on a recently updated Defense Department list of Chinese entities believed by the US to support Beijing's military. As reported by Business Standard, YMTC was included on the Pentagon list in January 2024, and CXMT was added in 2025. The companies are on the so-called 1260H list, a congressionally mandated roster of companies that the Defense Department has concluded support the People's Liberation Army. While the Pentagon's list carries few immediate legal repercussions, the US is increasingly using it to restrict companies' abilities to contract with the American military or receive research funding. A 1260H designation also serves as a warning to US investors, and is widely considered a red flag that can precede more punitive trade restrictions. YMTC faces additional restrictions on its ability to do business with American companies thanks to its inclusion in 2022 on a separate US Commerce Department blacklist, which bars companies from buying technology from US suppliers unless they get an export license.
Apple raised prices of all Macs, iPads, home devices and the Vision Pro last week, seeking to offset cost increases caused by the shortage of memory chips. A company spokesperson said that the rapid expansion of AI was to blame and that Apple had "never seen a component price increase this much, this quickly." The price increases reflect Apple's inability to absorb these costs while maintaining competitive pricing for consumers. As reported by Business Standard, the effort comes as Apple and other consumer electronics manufacturers grapple with an unprecedented squeeze on memory chip supply, touched off by the global artificial intelligence boom. High-end processors used in data centers require significant amounts of memory, and makers of memory devices have shifted production to serve a fast-growing market where they can demand higher premiums. Microsoft Corp. took similar steps the same day, announcing that it would raise prices on its Xbox video-game consoles for a third time in 13 months, owing largely to the memory squeeze.
The lobbying push underscores the challenges facing major US technology companies as soaring memory chip costs collide with Washington's national security restrictions on Chinese chipmakers. Buying chips from CXMT and YMTC would expand Apple's roster of memory suppliers to five, adding to the current reliance on South Korea-based Samsung Electronics and SK Hynix, along with US-based Micron Technology. Those memory chipmakers have struggled to keep pace with demand for their components, and each has outlined plans to expand their production lines to meet the needs of AI data centers. Earlier this week, Samsung and SK Hynix vowed to spend more than $880 billion to build two chipmaking plants apiece to rapidly expand capacity, and Micron has outlined its own plans to spend billions of dollars on additional production in the US. Apple had sought in 2022 to source some of its memory supply from YMTC, but that effort was derailed by opposition in Washington following the Chinese company's inclusion on the Commerce entity list.
If the Trump administration effectively allows Apple's CXMT purchase, Congress, which has been pushing back against Chinese tech companies, is likely to react strongly. House Foreign Affairs Committee Chair Brian Mast is already sounding opposition to the prospect of Apple sourcing memory components from the two Chinese producers. As reported by Business Standard, Mast said "CXMT and YMTC are Chinese military companies fueling the Chinese Communist Party's military modernization and pursuit of AI dominance. Allowing this decision to go forward would destroy the President's agenda to secure supply chains and win the AI Arms Race." The committee has jurisdiction over US export control programs. If major customers such as Apple begin adding China's CXMT to their supply chains to cut costs, the impact on South Korea's semiconductor industry is expected to be significant as well. The current global memory chip industry is monopolized by three companies: US-based Micron, South Korea's Samsung, and SK Hynix, apart from Chinese companies.
