He Wall Street Journal reports that Micron is pressuring the Trump administration to block Apple’s attempt to use memory chips from Chinese suppliers. Here are the details.
Apple’s Chinese chip plan would extend beyond China
Last month, just before Apple raised prices for several of its products due to the current memory shortage, Tim Cook gave an interview to The Wall Street Journalwhere he suggested that the United States should reconsider its decision to restrict access to certain Chinese suppliers.
In the days that followed, the Diary reported that Apple had already been seeking administration authorization to buy chips from China’s ChangXin Memory Technologies (CXMT). At the same time, the Financial times said Apple was in negotiations to buy chips from Yangtze Memory Technologies (YMTC). He FOOT would continue with say Apple was already testing DRAM chips from CXMT.
For context, CXMT and YMTC have been designated as Chinese military companies by the Pentagon, and YMTC is also on the Department of Commerce’s Entity List.
This doesn’t necessarily prohibit Apple from using its chips in products sold outside the US, but it has made any potential deal politically sensitive and sparked backlash against the company in the past.
Now, the Diary information That Apple has continued to pressure the Trump administration to approve the use of Chinese memory chips in products sold outside the US, rather than just in the Chinese market, and has faced opposition from Micron, which is pressuring officials to block the plan.
From the report:
In recent weeks, Apple Chief Executive Tim Cook and top executives have pitched Trump and officials including Commerce Secretary Howard Lutnick and Treasury Secretary Scott Bessent on a plan to use memory chips from China’s ChangXin Memory Technologies and Yangtze Memory Technologies in Apple products sold outside the U.S., people familiar with the discussions said.
Those arguments have been refuted by Micron, the only major American memory chip maker. Micron executives, including CEO Sanjay Mehrotra, warned Lutnick and other administration officials that allowing CXMT and other Chinese companies to sell to American technology companies, regardless of the sales region, could destroy the domestic industry in the same way that China played a role in decimating American steel and manufacturing plants, the people said.
Simply put, the general argument against Apple’s plan is that sourcing memory from heavily state-subsidized Chinese suppliers, even if only for the Chinese market, could ultimately undercut American producers and weaken competition.
Furthermore, the Diary reports that Micro says it can help alleviate shortages by accelerating construction of domestic plants and increasing U.S. investment.
Just a few weeks ago, a Micron executive suggested that Apple’s aggressive purchasing tactics had helped fuel the memory shortage, telling the Diary that “a couple of (its) customers” had been “very aggressive on pricing” during the 2023 market crash. He went on to argue that those rock-bottom prices discouraged investment in additional production capacity, which helped lay the groundwork for the current supply crisis.
Returning to the report, the Diary says that this dispute between Apple and Micron has put the Trump administration in an awkward position, as “the lobby fight will likely force Trump to choose between two of his top economic priorities: reducing prices for American consumers and increasing domestic production of semiconductors to reduce dependence on other countries.”
Apple, for its part, has spent most of the last two years touting investments like its $600 billion. American manufacturing programtogether with agreements with Intel and, most recently, a $30 billion deal with Broadcom.
This spending has been widely seen as an effort to build goodwill with the administration, giving Apple political capital to offset controversial requests like its attempt to source memory chips from restricted Chinese suppliers.
Micron, on the other hand, has seen its valuation follow the broader memory market. Its shares are up 191% so far this year and 727% over the past 12 months, although it has seen considerable volatility in recent weeks. The stock is currently trading 23% below its all-time high from late June, and is down 6.99% today alone.
In a statement to DiaryA White House spokesperson offered few direct indications of how the administration plans to square the competing priorities of Apple and Micron, saying only that it would seek “investments and economic relief for the American people while safeguarding our national security.”
Do you think the Trump administration should allow Apple to source components from CXMT and YMTC? Let us know in the comments.
To read the full WSJ report, follow this link.
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