Apple Asks Trump for a Hall Pass on Blacklisted Chinese RAM
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Apple shocked the tech world with massive price increases last week, with nearly everything from the MacBook Neo and Apple TV to the Mac Studio and Vision Pro going up between $100 and $1,300 over their previous prices. The reason? Skyrocketing memory and chip costs have created an “unsustainable” situation, leaving Apple unable to continue absorbing the increases.
This is clearly not something Apple wanted to do. Tim Cook tried to soften the blow by giving The Wall Street Journal a heads-up the week before, and in this week’s Power On newsletter, Bloomberg’s Mark Gurman said Apple’s “sales, operations, procurement and finance teams have spent months trying to avoid these increases.”
The good news is that it looks like Apple is still looking for ways to deal with this, but its latest tactic isn’t going to sit too well with the current US administration — or likely even those on the other side of the aisle.
According to the Financial Times, Apple wants the Trump administration to green-light the purchase of memory chips from a Chinese company that’s been blacklisted by the Pentagon. The supplier in question, CXMT, is believed to have connections to the People’s Liberation Army, and it’s not the first time Apple has considered purchasing chips from a Chinese company that was out of favor with the US government.
Securing CXMT as a memory supplier would help remedy a situation in which the tech giant is being squeezed by its own suppliers.
Financial Times
As the Financial Times reported in 2022, Republican lawmakers were “alarmed” when they heard that Apple was planning to add Yangtze Memory Technologies Co, or YMTC, to its list of suppliers. YMTC provides NAND flash chips, but it’s on the same “no-fly” list as CXMT — and for the same reasons, along with dozens of other Chinese companies.
In an ironic twist, the person raising the fuss in 2022 was none other than Marco Rubio, who was the Republican vice-chair of the Senate Intelligence Committee at the time (and the same Marco Rubio who supported a TikTok ban in early 2024).
Of course, Rubio is now the Secretary of State, and therefore likely to have a great deal of say on Apple’s request to the Trump administration to exempt a supply chain deal with CXMT.
What’s Apple Doing Here?
As the Financial Times notes, the Pentagon’s 1260H blacklist doesn’t legally prevent Apple from buying chips from either CXMT or YMTC. When Apple was “evaluating sources from YMTC” in 2022, that was exclusively for chips that would be used “in some iPhones sold in China.”
In other words, Apple had no plans to use those chips in iPhones that would leave Chinese borders, much less be sold in the United States. Apple has always sold distinct iPhone models in mainland China due to varying regulatory requirements and different cellular frequencies. Except for the iPhone Air and iPhone 17e, Chinese iPhone models remain the only ones in the world with two physical SIM card slots.
It’s likely Apple is lobbying to use CXMT along similar lines. China remains the second-largest smartphone market in the world, so using cheaper memory chips in Chinese iPhones could make a huge difference in Apple’s bottom line, allowing it to pass those savings on across the board.
Still, US lawmakers are unlikely to be any happier with Apple purchasing from a blacklisted company than they were four years ago. Back then, Rubio told the Financial Times that “Apple is playing with fire,” and would be “subject to scrutiny like it has never seen from the federal government.” Still, Congress also appeared to be conflating the issue with allowing those memory chips into US telecommunications networks and “millions of Americans’ iPhones” — something that Apple clearly wasn’t intending to do.
Regardless of whether that was merely hyperbole to cover up more complex trade issues, it’s those broader concerns that are on the table in today’s economy. It’s not only about where Apple uses the chips, but the idea that it will weaken the US economy by allowing Apple to rely on a company that receives subsidies from the Chinese government.
“Trump can show the courage to keep American memory alive for our security and our competitiveness or pour it down the drain so [Apple chief executive] Tim Cook can squeeze out a few more points of margin,” one former official told the Financial Times.
