The bipartisan warning targets two Chinese memory makers on the Pentagon’s 1260H list as Apple navigates an AI-driven memory shortage, higher sourcing costs and investor concern over margins.
A bipartisan group of U.S. senators has told Apple CEO Tim Cook to rule out any plan to source memory chips from Chinese suppliers ChangXin Memory Technologies and Yangtze Memory Technologies Co. by Aug. 21. The letter, first reported by Bloomberg, centers on concerns that CXMT and YMTC are linked to China’s military and broader U.S. export-control risks. The lawmakers said both companies appear on the Pentagon’s updated Section 1260H list of Chinese military companies, while YMTC also remains on the Commerce Department’s Entity List, which restricts access to certain U.S. technology, software and chipmaking equipment. They warned that even a China-only arrangement could carry wider supply-chain risk, writing, “Once a part clears qualification for Apple production, extending it worldwide is a single procurement decision away.” They also asked whether Apple transferred intellectual property to either company during component qualification, which could require Commerce Department approval depending on the technology involved. The dispute comes as AI data centers absorb more global memory output, tightening supply for consumer electronics as Samsung, SK Hynix and Micron direct more capacity toward high-bandwidth memory used in AI accelerators. Apple previously explored using YMTC flash memory in some iPhones in 2022, but dropped those plans after lawmakers raised national security concerns. Apple has argued it needs access to Chinese memory and has sought assurances that CXMT will not be added to the Entity List, Reuters reported, citing people familiar with the discussions. Blocking both companies would leave Apple more dependent on Samsung, SK Hynix and Micron, potentially weakening its pricing leverage as memory costs remain elevated. Apple shares closed at $338.19 on July 29, down 0.56%, after reaching an intraday high of $344.57, and extended losses in July 30 trading as investors also looked ahead to the company’s quarterly earnings report. Apple had not publicly responded to the letter at the time of writing. Lawmakers also asked whether the company sought priority supply from U.S. and South Korean manufacturers, a question that could shape sourcing plans for the 2027 iPhone cycle.