Apple is reportedly in advanced discussions to source memory chips from two Chinese semiconductor manufacturers placed on a US Pentagon blacklist, as the technology giant seeks to secure supplies during a global memory shortage fuelled by booming demand for artificial intelligence (AI) infrastructure.
‎According to Bloomberg News, citing people familiar with the matter, Apple is negotiating with ChangXin Memory Technologies (CXMT) and Yangtze Memory Technologies Co. (YMTC) to supply memory chips primarily for devices sold in the Chinese market. The discussions are ongoing, and no final agreements have been reached.
‎‎The move reflects mounting pressure on consumer electronics manufacturers as the AI boom reshapes the global semiconductor industry. Leading memory producers, including US-based Micron and South Korean firms Samsung Electronics and SK Hynix, have redirected much of their manufacturing capacity towards high-bandwidth memory (HBM), a critical component for AI servers and data centres.
‎‎That shift has significantly reduced the availability of conventional memory chips used in smartphones, tablets and personal computers, sending standard DRAM contract prices sharply higher. Industry estimates suggest prices rose by between 55% and 60% during the early months of 2026.
‎‎The supply squeeze has already affected Apple’s product pricing. The company recently introduced broad price increases across several hardware categories, with some MacBook, iPad and Vision Pro models reportedly becoming as much as 20% more expensive. Securing additional suppliers is therefore viewed not only as a cost-saving strategy but also as a way to ensure sufficient component availability through at least 2027.
‎‎However, the proposed sourcing arrangement carries considerable geopolitical and regulatory risks.
‎‎Both CXMT and YMTC are listed under the US Department of Defense’s Section 1260H designation, which identifies Chinese companies believed to support China’s military modernisation. While inclusion on the list carries reputational implications, it does not prohibit private US companies from conducting commercial business with the firms.
‎‎As a result, Apple would not require formal approval from the US government to purchase chips from either company under current regulations.
‎Nevertheless, the company is said to be concerned that Washington could tighten restrictions in the future by placing the manufacturers on the US Commerce Department’s Entity List, a move that would effectively prohibit American companies from doing business with them.
‎‎Bloomberg reported that Apple Chief Executive Tim Cook has personally engaged with senior Trump administration officials, including Treasury Secretary Scott Bessent, seeking assurances over the regulatory outlook before committing to any long-term supply agreements.
‎‎The negotiations have already drawn criticism from some lawmakers in Washington. Members of the House Select Committee on China have reportedly warned that sourcing components from companies alleged to have links to China’s military would deepen US technology dependence on Beijing at a time of heightened strategic competition.
‎The outcome of the talks could have significant implications not only for Apple’s global supply chain but also for the broader semiconductor industry, where AI-driven demand continues to reshape production priorities and intensify geopolitical tensions.
