Apple Asks Trump Administration for Approval to Buy Chips From Blacklisted Chinese Company

Apple is asking the Trump administration for permission to buy memory chips from ChangXin Memory Technologies (CXMT), a Chinese company that the Pentagon has placed on a blacklist, according to a Reuters report. Reportedly, Apple wants this approval to help ease the impact of rising memory chip prices on its business. 

Why Apple Is Doing This

Memory chip prices have been rising fast, mostly because AI companies are buying huge amounts of memory for their data centers. This has made it expensive for Apple to make products like iPads and MacBooks.

In fact, Apple raised the prices of iPads and MacBooks on Thursday, saying it could no longer absorb the rising cost of memory and storage chips on its own, Reuters reported.

To deal with this, Apple is now looking at CXMT as a possible new supplier, hoping it could offer lower prices and reduce its dependence on a small group of existing chip makers.

Why CXMT Is a Problem

CXMT is China's largest memory chip maker. But the U.S. Defense Department placed CXMT on a list of companies linked to China's military. This happened under the Biden administration.

Because of this, CXMT was also added to the Commerce Department's Entity List, Reuters noted. Companies on this list need special government approval before U.S. businesses can sell them technology or, in practice, do business with them. Such approval is usually denied.

Apple first approached the Commerce Department more than a month ago. Since then, the company has also spoken to other government officials and people with influence in Washington to push for approval.

The Bigger Picture

This situation shows the tough position big American tech companies are in right now. On one side, they are dealing with high chip prices driven by demand from the AI industry. On the other side, the US government is trying to limit ties with Chinese chip companies for security reasons.

Apple now has to balance saving money on chips with the political risk of working with a company the U.S. government has flagged as a security concern. It's still unclear whether the administration will approve Apple's request, or how Congress might react if it does.

For now, Apple, the White House, and CXMT have all stayed quiet on the matter, leaving the outcome of this lobbying push uncertain.

Read More: Microsoft Xbox Joins Apple in Raising Prices Amid AI-Driven Memory Shortage