Apple is pressing the Trump administration for permission to use memory chips from two Chinese suppliers in devices sold outside the United States, setting off a lobbying battle with Micron Technology, the only major US-based memory chip manufacturer. The global memory market is dominated by three producers — Samsung and SK Hynix of South Korea, and Micron — leaving Apple with limited alternatives as prices climb.

Apple CEO Tim Cook has held meetings with senior administration officials, including Commerce Secretary Howard Lutnick and Treasury Secretary Scott Bessent, to make the case for sourcing chips from ChangXin Memory Technologies (CXMT), a DRAM producer, and Yangtze Memory Technologies (YMTC), a NAND flash maker. Apple argues the move would help ease a global memory shortage and slow price increases for American consumers. The company has emphasized that the Chinese chips would be used exclusively in Apple products sold outside the United States.

The lobbying clash between Apple ($AAPL) and Micron ($MU) was first reported by The Wall Street Journal.

https://x.com/wallstengine/status/2080922598276575536

Standing in Apple's way is Micron Technology, whose CEO Sanjay Mehrotra has warned administration officials that allowing US technology companies to purchase from Chinese producers — even for overseas products — could seriously damage the domestic semiconductor industry. Micron has drawn parallels to the decline of US steel and manufacturing, where Chinese competition gradually eroded those sectors over time.

Memory Prices Have Quadrupled

Memory chip prices have quadrupled over the past year, according to research firm TechInsights. The surge has been driven primarily by AI data centres, which purchase large volumes of advanced memory at premium prices. That demand has reduced the supply available for smartphones, medical devices, and automobiles, and has stripped Apple of the pricing leverage it previously held over its chip suppliers.

Apple has accused Micron of profiting from the shortage, pointing to Micron's gross profit margins, which now exceed 80%, as evidence of price gouging. Apple also claims that Micron is directing new production capacity toward AI customers rather than consumer electronics.

Micron has rejected that characterization. The company says rising device prices reflect more than just memory component costs, and it has pledged to invest $250 billion in US manufacturing to expand domestic capacity.

National Security Concerns

Both Chinese companies at the center of the dispute carry significant national security designations. YMTC is on the US Entity List, a trade blacklist, and both CXMT and YMTC have been designated as Chinese military companies by the Pentagon. The designations reflect a broader US effort, accelerated under both the Biden and Trump administrations, to restrict Chinese access to advanced semiconductor technology and reduce American dependence on Chinese chip supply chains.

White House technology adviser Michael Kratsios told lawmakers this week that American companies should not be conducting business with firms on the Entity List.

Apple previously attempted to partner with YMTC in 2022 but withdrew after facing political pressure, including a warning from then-Senator Marco Rubio that Apple was "playing with fire." Rubio, now serving as Secretary of State, remains involved in the current discussions.

President Trump has praised both Apple and Micron for their investments in the United States and has so far avoided taking a public position. His administration is also engaged in active trade negotiations with China, adding further complexity to any decision on the matter. The outcome could set a precedent for how other US technology companies navigate the tension between cost pressures in their global supply chains and Washington's push to wall off advanced semiconductor manufacturing from China.