The Financial Times reports that Apple is seeking authorization from the Trump administration to buy memory chips from a blacklisted Chinese company. The move would help it meet product manufacturing demand during the current global memory supply shortage.
Demetri Sebastopulo and Michael Acton, reporting for financial time:
Apple is lobbying the Trump administration for authorization to buy memory chips from CXMT, a Chinese company that the Pentagon has blacklisted due to alleged connections to the People’s Liberation Army, according to six people familiar with the matter.
The iPhone maker has waged a lobbying campaign to get the White House’s blessing to help ease financial pressure on the company stemming from rising memory chip prices.
According to the report, Apple contacted the Commerce Department a month ago before recently expanding its lobbying efforts to obtain authorization.
The report explains that while Apple can technically buy memory chips from Chinese suppliers, Pentagon restrictions complicate matters.
Apple is not prohibited from purchasing chips from CXMT or YMTC, another Chinese memory chip maker. But the Pentagon has included both companies on its blacklist of Chinese Military Companies. The so-called 1260H list contains dozens of Chinese groups with alleged ties to the PLA that undermine US national security.
Meanwhile, apple dramatically increased the cost of several products, including Macs and iPads, on Thursday, citing rising prices for memory and storage chips.
Apple CEO Tim Cook told the Wall Street Journal a week before that he had no choice but to raise prices. In the article, Cook hinted that Apple was interested in purchasing memory chips from Chinese companies, if approval was granted.
China has national champion companies in memory and storage, but due to national security regulations, American companies would likely need licenses to work with them. Asked whether those restrictions should be eased, Cook said, “I think everything needs to be on the table,” adding, “I think we should look at the entire offer.”
It now appears that Apple is pushing harder for this solution after last week’s interview and this week’s price increases failed to deliver results. You can read the latest full report at financial time.
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