Apple wants to buy memory chips from a Chinese company that the U.S. military has blacklisted. That company, ChangXin Memory Technologies (CXMT), is on a list that blocks American firms from doing business with it without a special license; American companies require a special license to deal with firms on that list, and such licenses are rarely granted. Apple feels squeezed by rising memory chip prices, but national security rules stand in the way.
Memory chip prices have been climbing because the artificial intelligence industry is building data centers that need those same chips.
According to anonymous sources cited by the Financial Times, Apple initially approached the Department of Commerce over 30 days ago and also reached out to other White House staff and sympathetic Washington policymakers. Apple wants to buy from CXMT because those chips could cost less. But CXMT sits on a U.S. government blacklist. The Commerce Department controls licenses for exports to blacklisted companies, and it typically denies such requests.
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The blacklist that includes CXMT is called the Entity List. The Pentagon designated CXMT as a Chinese military company under the Biden administration. Last year, a U.S. interagency committee gave approval for CXMT to be placed on the Commerce Department's Entity List.
Apple is lobbying the Trump administration for a license to buy from CXMT. The outcome is uncertain.
Apple has already raised iPad and MacBook prices in response to climbing memory chip costs, a direct result of surging demand from AI data centers. The company's profit margins are under pressure, and sourcing cheaper chips from CXMT could provide relief. However, the geopolitical risks are significant: any deal could be seen as undermining U.S. efforts to curb China's semiconductor ambitions. The Trump administration, which has taken a hardline stance on China trade, faces a dilemma between supporting a major American corporation and maintaining national security policy.
Apple will keep pushing the White House and the Commerce Department for permission to buy cheaper memory chips from CXMT. The company's financial pressure will not go away as long as AI data centers keep driving up chip prices. But the national security concerns that put CXMT on the blacklist are unlikely to disappear either.
CXMT, based in Hefei, is one of the few Chinese firms attempting to produce DRAM memory chips domestically. Its addition to the Entity List was part of a broader U.S. strategy to restrict China's access to advanced semiconductor technology, a policy that has continued under both the Biden and Trump administrations. The Pentagon's designation of CXMT as a Chinese military company adds an extra layer of scrutiny, making any license application from Apple a politically sensitive matter.
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