Apple has reportedly lobbied the Trump administration for permission to buy memory chips from a Chinese manufacturer blacklisted by the Pentagon, as the AI boom continues to squeeze global semiconductor supplies.
The iPhone maker has approached US officials seeking reassurance over sourcing memory chips from ChangXin Memory Technologies (CXMT), according to the Financial Times, after soaring memory prices forced Apple into one of the broadest product price rises in its history.
The reported lobbying effort comes just days after Apple increased prices for Macbooks and iPads by around 20 per cent, warning that surging costs for memory and storage chips had become “unsustainable” as AI data centre spending continues to consume global semiconductor supply.
Apple’s move also follows a bruising week for global technology stocks, with concerns over memory shortages helping to trigger sharp falls across Asian markets.
South Korea’s Kospi plunged nearly seven per cent on Friday as memory giants SK Hynix and Samsung Electronics sold off, while Apple shares shed more than six per cent after announcing its price increases.
According to the FT, Apple has spent more than a month lobbying the Commerce Department and other officials in Washington over purchases from CXMT, despite the Chinese company appearing on a Pentagon blacklist of firms alleged to have links with the People’s Liberation Army.
While inclusion on the Defence Department’s list does not prohibit US companies from buying its products, it carries significant political and reputational risks. CXMT was also approved last year for inclusion on the Commerce Department’s Entity List, which would require export licences that are typically refused, although the designation has yet to be implemented.
City AM has approached Apple for comment.
AI demand reshapes chip market
For years, memory chips were among the cheapest components inside consumer electronics. But an explosion in demand for AI infrastructure has diverted production towards advanced memory used in data centres, leaving manufacturers of laptops, smartphones and tablets competing for tighter supplies of conventional DRAM chips.
“The triggers setting off this latest wave of selling are rate hike fright and supply chain fears,” Susannah Streeter, head of money and markets at Hargreaves Lansdown, said.
“The fight for memory chips, which has pushed up prices to eye-watering levels, is showing up in sharp increases for end-users. There’s a feeling that there’s only so long this can go on for.”
CXMT has emerged as one of the biggest beneficiaries of that supply squeeze. The Chinese memory champion, founded in 2016, recently reported first-quarter revenue rising more than 700 per cent year-on-year as global DRAM shortages drove prices sharply higher.
The company is now preparing for a blockbuster Shanghai listing as Beijing pushes to build domestic semiconductor champions.
Politics complicates Apple’s supply chain
Apple already sources memory chips from Micron in the US and South Korean manufacturers Samsung Electronics and SK Hynix.
But those suppliers have increasingly prioritised high-margin AI memory products as hyperscalers continue spending hundreds of billions of dollars expanding data centre capacity.
“The hand-to-mouth tech rally has come to an abrupt halt,” said Kathleen Brooks, research director at XTB. “Investors are taking their time and picking winners in the AI trade, while discarding others.”
Brooks added that markets were becoming increasingly selective across the sector, with investors rewarding companies directly benefiting from memory demand while questioning whether the current pace of AI infrastructure spending can continue indefinitely.
The reported Apple approach is also likely to face political resistance in Washington.
John Moolenaar, the Republican chair of the House China Committee, told the FT that partnering with CXMT “would be a grave mistake”, arguing it would deepen US dependence on Chinese supply chains at a time when policymakers are attempting to reduce reliance on Beijing in strategically important technologies.
