Apple seeks US approval to buy memory chips from blacklisted Chinese firm

Apple is reportedly seeking approval from the Trump administration to purchase memory chips from a currently blacklisted Chinese company to meet manufacturing needs amid the ongoing worldwide memory supply shortage, according to The Financial Times.

Demetri Sevastopulo and Michael Acton of The Financial Times report that Apple is lobbying the Trump administration to approve its purchase of memory chips from CXMT, a Chinese firm that the Pentagon has blacklisted due to suspected ties to the People’s Liberation Army, according to six sources familiar with the situation.

The iPhone manufacturer has launched a lobbying effort to secure White House approval to help mitigate the financial strain caused by rising memory chip costs.

According to the report, Apple reached out to the Commerce Department a month ago and has recently stepped up its lobbying efforts to seek approval.

While Apple can technically buy memory chips from Chinese vendors, Pentagon restrictions complicate the process. The company is not prohibited from purchasing chips from CXMT or YMTC, another Chinese memory chipmaker.

However, both firms are on the Pentagon’s Chinese Military Company blacklist, known as the 1260H list, which includes numerous Chinese entities believed to have ties to the PLA that pose a threat to U.S. national security.

Meanwhile, on Thursday, Apple significantly raised prices on several products, including Macs and iPads, due to higher costs for memory and storage chips. A week prior, Apple CEO Tim Cook told The Wall Street Journal that increasing prices was unavoidable.

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He also suggested that Apple might consider sourcing memory chips from Chinese companies if permitted. Although China has leading firms in memory and storage technology, U.S. national security regulations likely require American companies to obtain licenses to collaborate with them.

When asked whether these restrictions should be relaxed, Cook said, “I think everything needs to be on the table,” adding, “I think we should look at all supply.”

It appears Apple is intensifying its efforts for this approach following last week’s interview and the recent price hikes. The full latest report is available at The Financial Times.