Apple has approached U.S. officials to secure approval for buying memory chips from ChangXin Memory Technologies Inc. (CXMT), a Chinese company listed on a Pentagon blacklist citing alleged ties to the Chinese military. This move reflects Apple’s effort to control soaring chip expenses amid a global shortage impacting the tech sector.
The company is not currently barred from using CXMT as a supplier but seeks assurances that the firm will not be added to the more restrictive U.S. Entity List, which imposes severe licensing requirements and could disrupt supply chains. Apple has engaged with multiple agencies, including the Commerce Department, to obtain this clearance amid growing trade tensions between the U.S. and China.
Recently, Apple raised prices on several product lines, including Macs, iPads, and its Vision Pro augmented reality headset, citing escalating costs due to the unprecedented scarcity of memory chips and storage components. The firm had warned previously that these shortages would intensify, contributing to industry-wide production constraints and higher consumer prices.
Supply constraints have rattled global tech markets, sparking concerns that rising input costs might eventually curb device demand and weaken the momentum behind the chip market rally, which has been fueled by increased demand in artificial intelligence technologies.
The Pentagon’s 1260H list, where CXMT is featured, flags companies with potential military ties, acting as a warning sign to investors and companies but currently enforces limited direct legal restrictions. The same list had previously removed CXMT and another Chinese chipmaker, Yangtze Memory Technologies Co., before reinstating them in the latest update, underscoring persistent security concerns amid U.S.-China trade disputes.