Bloomberg reported on the 1st (local time) that Apple is negotiating to buy chips from two Chinese memory semiconductor companies that are on the U.S. Ministry of National Defense blacklist.
Citing sources, Bloomberg reported that Apple plans to buy memory components for devices sold in China from Changxin Memory Technologies (CXMT) and Yangtze Memory Technologies (YMTC). The sources added that talks are underway and nothing has been finalized.
CXMT and YMTC are on the "1260H list," which the U.S. Ministry of National Defense uses to designate companies that support the People's Liberation Army. While Apple does not need formal U.S. government approval to buy chips from the two companies, Bloomberg analyzed that it risks a backlash from national security hard-liners in the United States amid rising tensions in the U.S.-China technology sphere. Some officials in the Trump administration have already expressed internal opposition.
If Apple buys chips from CXMT and YMTC, the number of memory suppliers will increase to five. It currently relies on Samsung Electronics, SK hynix, and Micron.
House Foreign Affairs Committee Chair Brian Mast said, "CXMT and YMTC are Chinese military corporations that support the Chinese Communist Party's military modernization and pursuit of artificial intelligence (AI) hegemony," adding, "If this transaction goes through, it will undermine the president's agenda to secure supply chains and win the AI arms race."