I The Wall Street Journal reports that Micron is pressuring the Trump administration to block Apple’s push to use memory chips from Chinese suppliers. Here are the details.
Apple’s Chinese chip program will extend beyond China
Last month, just before Apple raised the prices of several of its products due to persistent memory shortages, Tim Cook gave an interview The Wall Street Journalwhen he suggested that the US should review its decision to limit access to certain Chinese suppliers.
In the following days, i Journal reported that Apple was already seeking approval from management to buy chips from China’s ChangXin Memory Technologies (CXMT). At the same time, the Financial Times said Apple is in talks to buy chips from Yangtze Memory Technologies (YMTC). I FT will continue to claim that Apple is already testing DRAM chips from CXMT.
In context, CXMT and YMTC have been designated as Chinese military companies by the Pentagon, and YMTC is on the Commerce Department’s business list.
This does not necessarily prevent Apple from using its chips in products sold outside the US, but making any deal could be politically sensitive and has caused backlash against the company in the past.
Now, i Journal reports that as Apple continued to push the Trump administration to approve the use of Chinese memory chips in products sold outside the US, rather than in the Chinese market, it faced opposition from Micron, which urged officials to block the plan.
From the report:
In recent weeks, Apple Chief Executive Tim Cook and senior executives have blocked Trump and officials including Commerce Secretary Howard Lutnick and Treasury Secretary Scott Besent on a plan to use memory chips from China ChangXin Memory Technologies and Yangtze Memory Technologies in Apple products sold outside the US, people familiar with the discussions said.
Those arguments have been answered by Micron, the only major US maker of memory chips. Micron executives, including CEO Sanjay Mehrotra, have warned Lutnick and other administration officials that allowing CXMT and other Chinese companies to sell to U.S. technology companies, regardless of which region they are sold in, could destroy the domestic industry in the same way that China played a role in destroying the U.S. steel and manufacturing industries, the people said.
In short, a common argument against Apple’s plan is that sourcing memory from Chinese suppliers who are heavily subsidized by the government, even if only for the Chinese market, could ultimately undercut US manufacturers and reduce competition.
In addition, the Journal reports that Micro says it can help ease the deficit by accelerating domestic plant construction and increasing US investment.
A few weeks ago, a Micron executive suggested that Apple’s acquisition tactics helped the memory shortage, telling Journal that “a couple of [its] customers” became “very aggressive on pricing” during the market downturn in 2023. He went on to say that those extremely low prices encouraged investment in additional production capacity, helping to set the stage for today’s supply cuts.
Back in the report, i Journal states that this dispute between Apple and Micron has put the Trump administration in an uncomfortable position, since “the war of lobbying may force Trump to choose between two priorities for his economy: reducing prices for American consumers and increasing domestic semiconductor production to reduce dependence on foreign countries.”
Apple, for its part, has spent the better part of the past two years promoting investments such as its $600 billion American Manufacturing Program, as well as deals with Intel and, most recently, a $30 billion deal with Broadcom.
The spending was widely seen as an effort to curry favor with executives, giving Apple political capital to settle controversial claims such as its push to source memory chips from restricted Chinese suppliers.
Micron, on the other hand, saw its valuation following the broader memory market. Its stock is up 191% year to date, and 727% over the past 12 months, although it has experienced significant volatility in recent weeks. Shares are currently trading 23% below their late June high, and are down 6.99% today alone.
In a statement to Journala White House spokesman gave little specific indication of how the administration plans to prioritize the competing priorities of Apple and Micron, saying only that they will pursue “investment and service for the American people while protecting our national security.”
Do you think the Trump administration should allow Apple to source parts from CXMT and YMTC? Let us know in the comments.
To read the full WSJ report, follow this link.
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