Apple Lobbies Trump Administration to Buy Chips From Pentagon-Blacklisted Chinese Firm

A Desperate Move in a Worsening Memory Crisis

Apple is lobbying the Trump administration for clearance to buy memory chips from CXMT, a Chinese company that the Pentagon has placed on a blacklist because of alleged connections to the People's Liberation Army — and the iPhone maker has waged a full lobbying campaign to get the White House's blessing in order to ease the financial pressure from rising memory chip prices. The move is as audacious as it is revealing: one of the world's most valuable companies is now so squeezed by a global chip shortage that it's willing to wade into politically treacherous waters to find relief.

The lobbying comes as Apple faces the most severe memory shortage in its recent history. The company raised prices across its Mac, iPad, and home device lineups on June 25, with increases ranging from $100 to $500 per product — with the MacBook Air 13-inch jumping from $1,099 to $1,299, the MacBook Pro 16-inch rising from $2,499 to $2,999, and Vision Pro climbing by $500. Apple's move followed price increases on MacBooks and iPads that triggered a $263 billion market value decline.

What Is CXMT, and Why Does It Matter?

CXMT is China's largest DRAM manufacturer and sits on the Pentagon's list of companies with alleged ties to the Chinese military. The distinction between the 1260H list and the Entity List matters enormously for Apple's supply chain calculus. Being on the 1260H list signals that the Pentagon considers a company to have military ties, but it does not block commercial transactions between private firms. The Entity List, maintained by the Commerce Department's Bureau of Industry and Security, would impose licensing requirements that could effectively cut off CXMT as a supplier.

While Apple isn't barred from using CXMT as a supplier, the iPhone maker is seeking guarantees that CXMT won't be added to the U.S.'s so-called Entity List, which would impose stiff licensing restrictions. The Commerce Department last year prepared to place CXMT on the Entity List, but the White House told officials to pause new controls while trade and rare earth negotiations with China were under way. Apple first contacted the Commerce Department about a month ago before recently expanding its lobbying efforts to gain clearance.

The Root Cause: AI Is Eating the World's Memory

The root cause of this crisis is a reallocation of global memory production toward AI. Samsung, SK Hynix, and Micron control more than 95% of DRAM output, and all three have been shifting capacity toward high-bandwidth memory — the specialized chips inside Nvidia's AI server clusters. That memory carries roughly 60% margins versus around 40% for commodity DRAM, so every wafer redirected to AI is a wafer pulled away from the memory inside phones, laptops, and tablets.

Memory prices have quadrupled over the past three quarters, according to Counterpoint Research, as Samsung, SK Hynix, and Micron have redirected wafer capacity from consumer DRAM to high-bandwidth memory for AI data centers. CEO Tim Cook called it a "hundred-year flood." The company warned last month that memory shortages would worsen over the course of the year.

Political Minefield Ahead

Apple already faced criticism in 2022 when it considered sourcing YMTC memory chips for China-sold iPhones, and security analysts now argue that approving reliance on a Chinese memory champion would cut against broader U.S. efforts to reduce dependence on China in critical technologies. Congress is expected to object if the Trump administration agrees with Apple's plan.

Apple has not commented on the CXMT report, and the Trump administration has also not indicated whether it will approve the request. This is not a one-quarter event — Micron expects tight supply beyond 2027, Intel's CEO has said relief is unlikely before 2028, and some analysts see pricing pressure lasting toward 2030. For consumers already sticker-shocked by higher Mac and iPad prices, that timeline means the worst may still be ahead — and Apple's willingness to court a Pentagon-blacklisted Chinese supplier signals just how limited its options have become.