Commerce Secretary Howard Lutnick has told Apple directly that the Trump administration does not want the company buying memory chips from China, delivering the message just a day after touring Apple’s new manufacturing facility in Houston with Tim Cook.
“The Trump administration is not in favor of that,” Lutnick said in an interview with the Wall Street Journal, adding that there have to be “other solutions to the memory issue, but it’s not great American companies using Chinese memory.” Asked whether he’d relayed that opposition to Apple directly, Lutnick said he had done so “plainly.”
Apple has spent the past few months seeking approval to buy memory chips from CXMT and YMTC as it looks for ways around a global memory shortage that forced price hikes across most of its product lineup in June. Both Chinese suppliers carry baggage that makes the request politically fraught: YMTC sits on the Commerce Department’s Entity List, and the Pentagon has designated both companies as Chinese military firms over alleged ties to China’s military.
Lutnick’s public rebuke lands one day after he stood alongside Cook and Senator Ted Cruz at Apple’s Advanced Manufacturing Center in Houston, part of the company’s $600 billion domestic manufacturing push that’s widely read as an effort to stay in the administration’s good graces. The turnaround from photo-op to public pushback suggests goodwill gestures on manufacturing aren’t buying Apple flexibility on chip sourcing.
Bipartisan Pressure Builds Ahead of August 21 Deadline
Congress isn’t waiting on the administration to act alone. A bipartisan group of senators led by Chuck Schumer and Jim Banks, joined by Mike Crapo, Jeanne Shaheen, Andy Kim, James Risch and Pete Ricketts, has demanded Apple commit by August 21 to avoiding CXMT or YMTC memory in any product sold anywhere in the world. Separately, Representatives John Moolenaar and George Whitesides sent their own letter to Lutnick pushing Commerce to formally add CXMT to the Entity List, which would make any purchase from the company illegal outright.
Apple has pushed back on the idea that it needs custom silicon to justify the switch. COO Sabih Khan told the WSJ that while Apple customizes many iPhone components, “there isn’t a lot of customization” in memory, an admission that undercuts the usual argument that Apple’s hardware requires bespoke parts and opens the door to off-the-shelf Chinese DRAM. Export lawyer Kevin Wolf of Akin Gump has noted Apple could legally buy off-the-shelf CXMT parts under current rules, even if it can’t commission custom-designed chips.
CXMT May Not Have Chips to Sell Anyway
Even if Washington eventually looks the other way, CXMT may not have chips to sell. The company has reportedly maxed out production for the year, prioritizing domestic buyers like ByteDance, Tencent and Xiaomi over new international customers, and its prices now sit level with, and sometimes above, those of Micron, SK Hynix and Samsung. DigiTimes has reported that Apple’s attempt to use CXMT as use in price talks with the Korean suppliers backfired, strengthening their pricing power rather than weakening it.
None of this is for Apple, in 2022, the company tried sourcing NAND chips from YMTC for China-market iPhones, only to shelve the plan after bipartisan backlash that included then-Senator Marco Rubio accusing Apple of “playing with fire.” Four years later, the same standoff is playing out again, this time with the shortage biting harder and the political spotlight even brighter.
With the Senate’s deadline six days out and Commerce’s opposition now on the record, the path to a Chinese memory deal for Apple looks narrower than ever. The underlying shortage driving up prices for consumers remains unresolved regardless of which way Washington ultimately rules.
