Bloomberg reports that US senators from both sides of the aisle are urging Apple CEO Tim Cook to commit by August 21 to not using memory chips from Chinese suppliers CXMT and YMTC. Here are the details.
A bit of context
As Apple looks for ways to navigate the ongoing memory shortage, the company has reportedly been seeking the Trump administration’s blessing to source components from CXMT and YMTC, two firms designated by the Pentagon as Chinese military companies.
Legally, Apple is not required to obtain US government approval to purchase chips from the companies, but doing so without the administration’s support could expose it to significant political ramifications.
Which is why, in an interview with The Wall Street Journal ahead of Apple’s recent price hikes, Tim Cook said that “everything needs to be on the table,” adding that “we should look at all supply.”
In the days that followed, the Journal reported that Apple had already been seeking assurances from the administration to purchase chips from CXMT. At the same time, the Financial Times reported that Apple was in negotiations to purchase chips from YMTC. The FT would go on to report that Apple was already testing CXMT’s DRAM chips.
More recently, the Journal reported that Apple’s use of Chinese memory chips could extend beyond China, with the company seeking the administration’s blessing to use components from CXMT and YMTC in products sold elsewhere outside the US.
The report also detailed Micron’s efforts to persuade the administration to reject Apple’s request, arguing that allowing Chinese suppliers into Apple’s supply chain could undermine domestic memory production.
This is not the first time Apple has tried to source memory chips from YMTC. In 2022, the company explored using the supplier’s components in some iPhones sold in China, but the plan was shelved after drawing scrutiny from US lawmakers and running into tighter export controls.
At the time, then-Senate Intelligence Committee Vice Chairman Marco Rubio accused Apple of “playing with fire,” while other lawmakers from both parties warned that the deal could pose national security risks.
Lawmakers renew pushback
Bloomberg reported today that “[a] bipartisan group of US senators urged Apple Inc. to abandon any efforts to buy chips from blacklisted Chinese semiconductor suppliers [CXMT] and [YMTC], warning that the iPhone maker risked becoming reliant on a US adversary for crucial components.”
The lawmakers, led by Indiana Republican Jim Banks and New York Democrat Chuck Schumer, highlighted that both CXMT and YMTC are on a recently updated Pentagon list of Chinese entities believed to support Beijing’s military.
According to the report, the lawmakers called Apple’s plan “short-sighted,” adding that it would “ensure the world’s most valuable consumer-electronics company grows dependent on critical supplies from a firm the United States government has formally designated as a Chinese military company.”
The lawmakers also argued that other companies could follow Apple’s lead, potentially undermining domestic memory production and planned investments in states such as Indiana, Idaho, New York, and Virginia.
They added that any initial restriction limiting CXMT memory to products sold in China would be unlikely to hold, since “once a part clears qualification for Apple production, extending it worldwide is a single procurement decision away.”
Finally, in addition to asking Apple to commit by August 21 “to avoid incorporating CXMT or YMTC memory into its products,” the senators sought details about any information Apple has shared with CXMT during the component qualification process, noting that the transfer of controlled technical information to advanced chipmaking facilities in China may require a Commerce Department license.
Apple did not immediately respond to Bloomberg’s request for comment.
To read Bloomberg’s full report, follow this link.
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