The Fruity Cargo Cult Apple is poking US politicians by trying to buy cheap Chinese memory during a global shortage.
According to the Financial Times US House China committee chair John Moolenaar has urged the Trump administration to ban US companies from buying memory chips from CXMT and YMTC. He said the move was needed to avoid dependence on China for critical parts of AI infrastructure.
This sets the US government against the might and powers of the fruity Apple cult which has been looking to CXMT and YMTC to help it out of a hole. Apple is having to hike its prices as memory costs increase, or lose its margins on its iPhone cash cow.
However, this puts it at odds with the China hawks in the US government.
Moolenaar, the Republican head of the panel, said he was “alarmed” that Job’s Mob and other US companies were trying to buy memory chips from Chinese semiconductor makers. The lobbying comes as the industry faces a global shortage of DRAM chips.
In a letter to Commerce Secretary Howard Lutnick, Moolenaar and Democratic Congressman George Whitesides said dependence on Chinese chips would create “an unacceptable risk for US national security, economic security and supply chain security”.
“Leading Chinese memory manufacturers are all closely intertwined with the Chinese military. Every memory purchase by a US company will directly subsidise the People’s Liberation Army’s development of this critical technology that can be used for military and civilian purposes, Moolenaar wrote in the letter obtained by the FT.
The letter follows an FT report that Job’s Mob was lobbying the administration for clearance to buy chips from CXMT. This year, the Pentagon added CXMT to its “Chinese Military Companies” blacklist.
That listing does not ban Job’s Mob from buying CXMT chips, but it makes the politics rather stickier for the iPhone maker.
The lawmakers asked the administration to ban US firms from buying chips from any group on the “Chinese Military Companies” list or the Commerce Department’s “Entity List”. The latter imposes licensing restrictions on exports of US technology.
They urged Lutnick to put CXMT on the entity list and tighten restrictions on YMTC, which is already on it. The FT reported last year that the Trump administration had prepared to list CXMT, then backed off over fears it could upset trade talks with China.
The lawmakers asked the administration to work with Japan, Korea and the EU on a coordinated approach to stop CXMT and YMTC from “exploiting the global memory shortage to penetrate allied supply chains”.
They said allowing US companies to buy memory chips from CXMT and YMTC would create a “permanent reduction in Western memory manufacturing capability”. They warned this would create a “strategic dependency” on China as AI becomes critical to US military and economic power.
CXMT and YMTC specialise in DRAM and NAND, respectively, the sort of components that end up in smartphones and data centres. Both were founded to reduce China’s near-total reliance on foreign suppliers.
For now, CXMT and YMTC mainly supply the Chinese market. Both have been hit by existing US restrictions on semiconductor manufacturing equipment exports, which have kept them behind international rivals on manufacturing complexity.
