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An exterior view of an Apple Store in Brooklyn, New York. / Courtesy of AP Yonhap

Apple is reportedly actively reviewing the purchase of memory chips from a Chinese enterprise placed on the U.S. government's blacklist. This move aims to lower production costs, which have risen significantly due to the shortage of memory semiconductors triggered by the explosion in AI demand.

The Financial Times (FT) reported on the 26th (local time) that Apple is lobbying officials of the Donald Trump administration, including the U.S. Department of Commerce, to approve the purchase of Chinese-made memory chips.

The Chinese semiconductor manufacturer Apple is showing interest in is known to be ChangXin Memory Technologies (CXMT). CXMT is a DRAM manufacturer that the U.S. Department of Defense has placed on a sort of blacklist termed "Chinese Military Companies (1260H)" on the grounds of its links to the Chinese People's Liberation Army.

While being included in the respective list does not entail immediate legal sanctions, transacting enterprises must bear reputational risks. Companies included in the list are barred from directly contracting with the U.S. Department of Defense starting at the end of this month, and purchasing their products and services through third parties will also be prohibited starting from 2027.

Apple embarked on this lobbying push because it needs to promote supply chain diversification due to surging memory prices. Recently, Apple raised the prices of its entire MacBook and iPad lineups simultaneously, citing the rise in memory prices. Immediately following the price hike announcement, Apple's stock price plummeted by over 6%. In terms of market capitalization, it shed 263 billion dollars (approximately 403 trillion won), marking the second-largest decline in Apple's history.

Whether the lobbying effort will succeed remains uncertain. The biggest variable is cited as opposition from the U.S. Congress. John Moolenaar (Republican, Michigan), chairman of the House Select Committee on the Chinese Communist Party, criticized, "It would be a grave mistake for Apple to cooperate with a Chinese military company," adding, "It could result in helping the Chinese Communist Party seize control of core supply chains."

Secretary of State Marco Rubio also strongly opposed Apple when he was a senator back in 2022, when the company was reviewing the adoption of memory chips from China's YMTC, warning that it was "playing with fire." YMTC is a company specializing in NAND flash memory and is listed on the Chinese military companies blacklist.

                                                                                                           Chae Jong-il