Apple is pushing the White House to let it buy memory chips from a Chinese company that is on a Pentagon blacklist, according to a report from the Financial Times. The move is part of the tech giant's effort to control rising costs for semiconductors.
The US company has been talking to officials at the Commerce Department and other parts of the Trump administration, the Financial Times reported on Saturday, citing six people familiar with the matter. Apple wants approval to purchase chips from ChangXin Memory Technologies Inc., or CXMT, which is China's top memory chipmaker.
Why CXMT is blacklisted
CXMT is on the Pentagon's 1260H list, which names companies that the US government says have ties to the Chinese military. The company was added to this list under the Biden administration, according to the Financial Times report.
According to Yahoo Finance, Apple approached the Commerce Department more than a month ago and also reached out to other administration officials and allies in Washington.
What Apple is asking for
Apple is not currently banned from using CXMT as a supplier. But the iPhone maker wants guarantees that CXMT will not be added to the US's so-called Entity List. That list would impose strict licensing restrictions on any company doing business with CXMT.
According to the Financial Times, the iPhone maker wants the Trump administration to sign off on these purchases to ease pressure from rising semiconductor prices.
The request comes as trade tensions between Washington and Beijing continue over technology and national security issues.
Our Take: A risky but necessary move for Apple
Apple's push to buy from CXMT shows how hard it is for big tech companies to balance costs with politics. On one hand, Apple needs cheaper chips to keep its products affordable and its profits healthy. On the other hand, buying from a blacklisted Chinese company could create serious national security concerns for the US government.
In our view, this is a calculated gamble by Apple. The company knows that if CXMT gets added to the Entity List later, it could face major supply chain problems. So it is asking for clarity now. But the timing is tricky — the Trump administration is taking a tough stance on China, and approving this deal could look weak.
For consumers, this matters because chip costs affect the price of iPhones and other Apple products. If Apple can get cheaper chips, it might keep prices lower. But if the deal is blocked, those costs could be passed on to buyers.
