Apple seeks to buy blacklisted Chinese chips after economic pressure mounts: Secret lobbying with Trump administration!
Apple seeks to buy blacklisted Chinese chips after economic pressure mounts: Secret lobbying with Trump administration!
It has been revealed that American technology company Apple has been lobbying the Trump administration to buy chips from a Chinese company that the government has blacklisted. The US Department of Defense (Pentagon) is lobbying the Trump administration to get permission to buy memory chips from Changxin Memory Technologies (CXMT), a Chinese company that the US Department of Defense has blacklisted for alleged ties to the Chinese military, according to a report in the Financial Times.
Citing six sources familiar with the matter, the Financial Times said that Apple has sought such permission from the US government to ease financial pressure after memory chip prices continued to rise. According to one source, Apple first contacted the US Commerce Department a month ago for permission to buy chips from a blacklisted Chinese company. Since then, the company has been trying to get approval through other administration officials and its allies in Washington.
Apple is currently not legally prohibited from purchasing chips from CXMT or another Chinese memory chip maker, YMTC. But the Pentagon has placed both companies on a blacklist called “1260H” for alleged ties to the Chinese People’s Liberation Army. The list includes dozens of Chinese companies suspected of posing a threat to US national security. While there are no legal obstacles to doing business with blacklisted companies, it poses a risk to the company’s reputation.
Product price hikes impact on stock market
Apple had decided to raise the prices of its MacBook and iPads just a few days ago. The company had said that it had raised the prices of its products after the price of memory chips reached unsustainable levels. The company’s stock market value fell by about $263 billion in a single day after the price hike, the second-largest daily decline in its history.
If CXMT can be included as a new supplier, Apple is expected to be able to reduce its dependence on its current major suppliers and control rising costs.
Opposition from US lawmakers
John Mullen, the Republican chairman of the US House of Representatives’ China Committee, said it would be a “serious mistake” for Apple to partner with a company linked to the Chinese military. He warned that such a move would help the Chinese Communist Party dominate a crucial technology supply chain and make the US technology industry and economy more dependent on China.
Security analyst Michael Sobolick also said that the decision to increase its reliance on China in sensitive areas such as artificial intelligence (AI) would go against the administration’s own policies.
Apple’s plan to use YMTC memory chips for iPhones sold in China in 2022 also faced strong opposition from US politicians.
At the time, Marco Rubio, the top Republican on the US Senate Intelligence Committee, said Apple was “playing with fire.” He warned that the company would face unprecedented surveillance and scrutiny from the federal government if it made the move.
The global memory chip market is dominated by a handful of companies, including Samsung and SK Hynix of the US, South Korea and others. Apple currently relies on US companies Micron, Samsung and SK Hynix for the DRAM memory used in its devices.
In 2023, DRAM chip prices fell due to oversupply, which companies like Apple benefited from. But in the last three years, as big tech companies have invested billions of dollars in AI infrastructure, demand for high-end HBM (High Bandwidth Memory) chips has increased sharply.
This has created a shortage of traditional memory chips used in consumer electronics and prices have also increased significantly. Along with the increase in chip prices, the prices of electronic goods including smartphones, computers and others have also started to increase sharply.
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