Apple is pressing the Trump administration to obtain approval to purchase memory chips from CXMT, a Chinese manufacturer blacklisted by the Pentagon for alleged ties to the People’s Liberation Army.
As explained by the Financial Times, one of the newspapers reporting the news, the Cupertino company’s move stems from the urgent need to contain the surge in memory chip prices, which has already pushed Apple to raise the list prices of MacBooks and iPads, causing a loss of $263 billion in market capitalization.
Apple’s Lobbying Campaign
For over a month, Apple has launched an intense lobbying effort, initially addressing the Department of Commerce and then extending contacts to other key administration officials and political allies in Washington.
What the company wants is not a formal authorization request – technically Apple can still buy from CXMT or YMTC – but a political “cover” to reduce reputational risks and future regulatory constraints.
The main goal is to ease the strong financial pressure resulting from the memory price hike, which is eroding the company’s profit margins.
In an industry where component costs heavily impact results, having an additional supplier like CXMT could represent an important relief valve.
Price Increases and Market Repercussions
Apple’s decision to raise MacBook and iPad prices by 20% was a strong signal of how unsustainable the situation has become. In a single day, $263 billion in stock value evaporated, one of the heaviest drops in the recent history of the stock.
The company justified the pressure on the government with the “unsustainable” memory costs, following the example of other electronics manufacturers.
This price increase comes after a period when Apple had managed to accumulate abundant stock at low prices, thanks to the DRAM market crash in 2023.
Today, however, the scenario is completely reversed and the company finds itself squeezed between suppliers raising prices and consumers reluctant to accept increases.
The American Blacklists
CXMT and YMTC appear on the so-called Pentagon 1260H list, which includes Chinese companies considered linked to the military apparatus and potentially harmful to U.S. national security.
Being on the list is a measure that mainly generates reputational risk, but it can precede stricter restrictions, such as inclusion on the Department of Commerce’s Entity List, which would effectively block transactions.
Last year, the Department of Commerce had prepared a package to also include CXMT, but the White House held back to avoid compromising trade negotiations with Beijing.
The Financial Times recalls what happened last February, when the list was withdrawn and then republished within a few hours, with CXMT and YMTC reinserted after the White House was irritated by their temporary removal.
The Criticism
The opposition front is united and bipartisan. John Moolenaar, Republican chairman of the China Commission in the House, observed that for Apple “choosing to do business with a Chinese military company would be a grave mistake.”
According to the congressman, this type of partnership would help the Chinese Communist Party dominate critical supply chains, increasing American dependence just as efforts are being made to build more secure supply chains with allies.
Already in 2022, current Secretary of State Marco Rubio warned Apple not to “play with fire” regarding the possibility of using YMTC chips for iPhones, promising a very strict review by federal authorities.
Experts like Michael Sobolik of the Hudson Institute highlight the inconsistency: while efforts are underway to reduce Chinese dependence on all fronts, approving new dependencies would be paradoxical.
A former official warns that the United States risks “losing another industry” to companies heavily subsidized by Beijing.
The DRAM Market Landscape
The DRAM chip market is highly concentrated: outside China, only three major players dominate – Micron in the United States, Samsung and SK Hynix in South Korea – on whom Apple relies for the memory of its devices.
CXMT is positioning itself as China’s “national champion,” with the declared goal of challenging the leaders, and has already obtained approval to list in Shanghai.
After the 2023 oversupply, which caused prices to collapse and favored buyers like Apple, the AI boom changed everything.
The voracious demand for advanced HBM memory for data centers has created a chronic shortage of traditional DRAM, skyrocketing prices and putting the entire consumer electronics industry in difficulty.
Between Pragmatism and Realism
In conclusion, the case highlights a pressing tension: on one side, Apple’s needs for profitability and competitiveness; on the other, Washington’s strategic priorities in containing China’s technological rise.
The Trump administration’s response will indicate which line will prevail between economic pragmatism and geopolitical realism.
