Apple seeks approval to buy chips from blacklisted Chinese firm, FT reports

• CXMT was designated as a Chinese military company by the Defense Department and added to the Commerce Department's Entity List, requiring U.S. companies to obtain licenses (likely to be denied) before conducting business
• Apple approached the Commerce Department over a month ago and has engaged multiple administration officials and Washington allies to secure approval
• Apple raised iPad and MacBook prices on Thursday, citing inability to absorb soaring memory and storage chip costs driven by AI industry's data center expansion

Summary

Key Development: Apple is lobbying the Trump administration for permission to purchase memory chips from ChangXin Memory Technologies (CXMT), a Chinese chipmaker blacklisted by the Pentagon as a Chinese military company.

Background: CXMT, China's leading memory chip manufacturer, was designated as a military-linked company under the Biden administration and added to the Commerce Department's Entity List. U.S. companies require licenses—typically denied—to conduct business with listed entities.

Apple's Actions: The tech giant approached the Commerce Department over a month ago and engaged multiple administration officials and Washington allies. The lobbying effort aims to secure approval amid rising memory chip costs that are creating financial pressure on the company.

Market Context: Apple recently raised prices for iPads and MacBooks on Thursday, citing its inability to absorb soaring memory and storage chip costs driven by the AI industry's data center expansion. The situation highlights the difficult position facing major U.S. technology companies caught between escalating chip prices and national security restrictions on Chinese suppliers.

Broader Implications: This development underscores the tension between U.S. tech companies' economic interests and Washington's national security concerns regarding Chinese technology firms. The outcome could set precedent for how the administration balances commercial pressures against security restrictions, particularly as AI-driven demand continues pushing chip prices higher.

Status: Apple, the White House, and CXMT have not commented on the reports. The administration's decision could significantly impact Apple's cost structure and pricing strategy going forward.