US government asks Apple not to buy Chinese memory chips

The US government has put pressure on Apple not to purchase memory chips from Chinese manufacturers. That is according to The Wall Street Journal. The move follows earlier reporting by the same newspaper that Apple had been in talks about sourcing chips from Chinese semiconductor company CXMT.

The request fits a broader pattern of US policy efforts to prevent large technology companies from becoming dependent on Chinese chip manufacturers, particularly in the area of memory components used in virtually every consumer electronics product.

Apple has not yet publicly responded to the reports. The US government has also not officially commented on its contact with the company.

Background: CXMT and the rise of Chinese chipmakers

CXMT, short for ChangXin Memory Technologies, is one of the fastest-growing Chinese producers of DRAM memory modules. Founded in 2016, the company focuses on developing memory components traditionally dominated by South Korean players such as Samsung and SK Hynix, and US-based Micron.

In recent years, CXMT has invested heavily in production capacity and has been working to close the technology gap. Although the company remains technologically behind the global market leaders, its chips are attractively priced. That makes them appealing to buyers looking to reduce procurement costs or diversify their supplier base.

Earlier this year, the United States already imposed a series of export restrictions on advanced semiconductor equipment destined for China, partly to slow the development of Chinese chip capacity. CXMT itself is not yet on the so-called Entity List maintained by the US Department of Commerce, the list of companies with which US parties may not do business without a special licence.

Apple's position in the supply chain

Apple has for many years sourced a large share of its components from Asia, with China playing a central role as a manufacturing location. At the same time, the company has been working to diversify its assembly capacity to countries such as India and Vietnam, partly at the urging of investors and in response to geopolitical risks.

In the area of memory components, Apple has traditionally worked with Samsung and SK Hynix. Any move toward CXMT would have represented a notable shift in direction. Whether Apple was actually engaged in concrete procurement talks or merely exploring the market cannot be determined with certainty based on available reporting.

For Apple, balancing cost control with geopolitical risk is an ongoing concern. The company sells a significant share of its products in China and relies on Chinese suppliers for manufacturing. At the same time, pressure from Washington to distance itself from Chinese technology in sensitive parts of the supply chain is growing.

Broader trade policy context

The request to Apple does not stand in isolation. In recent years, the US government has taken a series of measures to reduce dependence on Chinese semiconductors. Through the CHIPS and Science Act, passed in 2022, Washington is allocating more than $52 billion to build domestic chip production capacity on US soil.

At the same time, Washington is pressing allies and US companies to avoid Chinese chipmakers, even those not yet formally subject to export restrictions. Informally approaching major buyers such as Apple is an additional instrument in that effort, alongside formal trade policy measures.

The memory chip sector is particularly sensitive in this regard. DRAM and NAND flash are ubiquitous components in smartphones, servers and vehicles. A strong Chinese position in this market would increase the strategic dependence of Western technology companies, at least, that is the reasoning in Washington.

What this means for the European and Dutch tech scene

The pressure Washington is exerting on Apple illustrates how geopolitical dynamics are increasingly having a direct impact on the procurement decisions of large technology companies. For European and Dutch companies that supply the global chip chain, or that are themselves dependent on memory chips, this is a development worth monitoring.

European chip companies and suppliers find themselves in a similarly fraught position. The EU is working through the European Chips Act to build more domestic production capacity, but practical dependence on Asian memory producers remains significant for the time being. Policymakers in Brussels and The Hague are closely tracking the US approach, not least because similar pressure on European companies cannot be ruled out should trade policy tensions escalate further.