Apple is facing direct pressure from the Trump administration over its plans to source memory chips from China, as the company searches for more suppliers during a global memory shortage that has pushed component costs higher across the consumer electronics industry.
The Wall Street Journal reports that US Commerce Secretary Howard Lutnick has told Apple that the administration opposes the company buying memory chips from Chinese manufacturers, including CXMT and YMTC, even as Apple continues evaluating additional suppliers to ease supply constraints.
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Apple has reportedly sought approval to buy memory from the two Chinese companies, although both have attracted scrutiny from US officials over alleged links to China’s military. YMTC also remains on the US Commerce Department’s Entity List, while the Pentagon has designated both YMTC and CXMT as Chinese military companies.
Trump administration pushes Apple toward other memory suppliers
Apple COO Sabih Khan told the Journal that Apple customizes many components used inside the iPhone, although “there isn’t a lot of customization” required for memory chips, which leaves open the possibility of using standard memory components from Chinese suppliers.
However, Lutnick made the administration’s position clear after touring Apple’s Advanced Manufacturing Center in Houston, Texas, where he appeared alongside Apple CEO Tim Cook, Senator Ted Cruz, and other officials.
“The Trump administration is not in favor of that,” Lutnick told The Wall Street Journal. There have to be “other solutions to the memory issue, but it’s not great American companies using Chinese memory.”
Lutnick also said he had communicated that opposition to Apple “plainly,” adding another political obstacle as the company considers how to handle rising memory prices and limited global supply.
Apple has already signaled that it wants more options, with Cook previously saying the US should “look at all supply,” while he told investors during Apple’s recent earnings call that the company was “evaluating all options.”
The pressure comes as Apple expands its US manufacturing commitments through a planned $600 billion investment, although Lutnick’s comments indicate that the administration still expects the company to find alternatives to Chinese memory suppliers.
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