Apple negotiates with blacklisted Chinese chipmakers amid AI-driven memory crunch
Yahoo Finance ·
Apple negotiates with blacklisted Chinese chipmakers amid AI-driven memory crunch Louis Juricic Wed, July 1, 2026 at 4:38 PM EDT 2 min read AAPL MU 005930.KS 000660.KS Investing.com -- Apple Inc. is in active negotiations to purchase memory chips from two prominent Chinese semiconductor manufacturers that currently reside on a Pentagon blacklist. The high-stakes gamble comes as the iPhone maker scrambles to secure component supplies amid a global memory crunch that has already forced Apple to enact rare, widespread price hikes across its product lineup. According to a report from Bloomberg News, citing people familiar with the matter, Apple is seeking to secure memory components from ChangXin Memory Technologies Inc. (CXMT) and Yangtze Memory Technologies Co. (YMTC). The components would primarily be used in devices sold within the Chinese market. While discussions are ongoing, no final agreements have been reached. The "global memory shortage" forcing Apple's hand is a direct byproduct of the artificial intelligence boom. The world's dominant memory suppliers—Micron (US), Samsung, and SK Hynix (South Korea)—have aggressively shifted their production lines away from standard consumer electronics memory to focus on lucrative, high-bandwidth memory (HBM) required for AI data centers. This pivot has left consumer tech companies stranded. Standard DRAM contract prices surged by an estimated 55% to 60% in early 2026. The financial strain recently forced Apple into an unprecedented move: raising retail prices globally by up to 20% across its MacBook, iPad, and Vision Pro lines. Sourcing from Chinese suppliers is no longer just a cost-saving measure for Apple; it is a necessity to guarantee physical supply through 2027. Both CXMT and YMTC appear on the U.S. Defense Department's Section 1260H list, which designates Chinese entities believed to support Beijing's military modernization. Crucially, the 1260H designation carries severe reputational risks but does not legally bar private commercial transactions, meaning Apple does not require formal U.S. government approval to buy their chips. However, Apple is hyper-aware of the regulatory volatility. Sources indicate that Apple Chief Executive Officer Tim Cook has personally appealed to Trump administration officials, including Treasury Secretary Scott Bessent, to secure regulatory assurances. Apple's primary fear is that if they sign multi-billion-dollar contracts with CXMT or YMTC, Washington might escalate the sanctions and place the chipmakers on the stricter Commerce Department Entity List, which would legally mandate a total trade ban.. Despite Tim Cook's lobbying efforts, the proposed deals face fierce headwinds in Washington. Critics, including leadership on the House Select Committee on China, have already condemned the talks, warning that relying on military-linked Chinese firms is a "grave mistake" that deepens U.S. tech dependency on Beijing during a period of peak geopolitical tension. JPMorgan outlines ten strategic themes that could shape the outlook for 2026 As Claude disrupts stock market, Anthropic researcher warns 'world is in peril'
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