According to an investigation by the Financial Times, Apple is seeking clearance from the Trump administration to purchase memory chips from CXMT, a Chinese manufacturer recently added to the Pentagon's 1260H list. This list includes companies believed to be linked to the Chinese People's Liberation Army. While Apple is not technically prohibited from doing business with CXMT, it could face repercussions from the US government without explicit approval. The White House and Congress are evaluating the request, but political sources anticipate strong opposition.
The 1260H list and Pentagon restrictions
The US Department of Defense can only contract with companies not on the 1260H list. Apple approached the Commerce Department a month ago and is also leveraging its Washington connections to obtain the green light. If the deal goes through, Apple could diversify its memory chip supply, currently reliant on Micron (US), Samsung, and SK Hynix (South Korea).
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The memory chip shortage and Apple's price hikes
The move comes amid a global memory chip shortage. Apple recently raised prices on most of its hardware: the 1TB M5 MacBook Pro costs $300 more, the entry-level MacBook Neo has a $100 increase, and all iPad Pros are $200 pricier. Tim Cook had warned that the company could no longer escape the memory crunch. Purchasing from CXMT could help mitigate costs and secure alternative supply.
However, Congress is strongly opposed. John Moolenaar, who leads congressional investigations into China's geopolitical influence, told the Financial Times: "Apple choosing to partner with a Chinese military company would be a grave mistake." The case raises questions about balancing commercial interests and national security, a hot topic also for SMEs in the tech sector. To explore how businesses can optimize their digital strategies in uncertain times, read the article on Landing Page Optimization for Italian SMEs.
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The situation remains fluid. Apple must overcome not only bureaucratic hurdles but also intense political pressure. A similar precedent occurred in 2020 when the US government blocked chip sales to Huawei. The difference is that Apple is an American company, but CXMT is linked to the military, making the request particularly sensitive. According to supply chain experts, if Apple gets permission, it could set a precedent for other US companies. Conversely, a denial could push Apple to further invest in domestic chip production, as it is already doing with its M-series chips.
For more background on the geopolitics of semiconductors, refer to the Wikipedia entry on CXMT.
Source: https://www.engadget.com/2203121/apple-looking-buy-chips-blacklisted-chinese-company
