Apple tests Chinese memory chips, raising US security concerns
Pentagon threatens Apple's plans for cheaper memory chips (Photo: Unsplash)
Apple has started testing dynamic random-access memory (DRAM) chips produced by Chinese company ChangXin Memory Technologies (CXMT). The move is part of the company's strategy to diversify its supply chain amid unprecedented price increases and a global shortage of components, according to Financial Times.
Lobbying in Washington and Apple's compromise plan
Although Apple already works with the world's three largest memory chip manufacturers — Samsung, SK Hynix, and Micron — the company has been forced to raise prices for its iPad and Mac product lines due to rapidly increasing component costs.
The artificial intelligence boom has pushed major industry players to redirect production capacity toward data centers, causing a shortage of consumer DRAM memory.
To avoid violating US regulations while protecting its profits, Apple has proposed a compromise solution: using CXMT chips exclusively in devices manufactured and sold within China.
This would free up memory supplies from Micron and Samsung for devices shipped to the US and European markets.
Since inclusion on the Pentagon's 1260H list does not formally ban commercial transactions (but only restricts eligibility for US government procurement), Apple is legally allowed to test the chips.
However, the company is seeking guarantees from Donald Trump's administration that CXMT will not later be moved to the Commerce Department's stricter Entity List, which would result in a complete ban on supplies.
CXMT's rise and political opposition in Congress
ChangXin Memory Technologies remained a relatively unknown local player for years. Over the past decade, it suffered billions of dollars in losses and operated largely thanks to Chinese government subsidies (the company currently has at least 15 state-owned shareholders).
However, the current global semiconductor crisis has turned it into a leader of China's chip self-sufficiency efforts, making it the world's fourth-largest DRAM manufacturer with a market share of around 11%.
The company is also preparing for a major IPO aimed at raising $4.3 billion to further expand its manufacturing facilities.
Apple's plans to involve a Chinese state-backed manufacturer have already sparked strong criticism among US lawmakers.
Congress members, including China committee chairman John Moolenaar, called the potential partnership "a serious mistake" that would financially strengthen a Beijing-controlled competitor and deepen the American tech giant's dependence on China's supply chains.
Meanwhile, Apple CEO Tim Cook continues negotiations with senior US administration officials, attempting to reduce political fallout and find a balance between US national security concerns and the corporation's economic interests.
