Not-so-pleased with Apple, the US government tells iPhone maker: Think of better ideas than going to China for …

Apple is facing pressure from the US over its plans to source memory chips from Chinese manufacturers as a global shortage pushes up the component’s price. US Commerce Secretary Howard Lutnick said the administration does not want Apple to buy memory chips from China and told the iPhone maker to look for alternatives. “The Trump administration is not in favour of that,” Lutnick said in an interview after touring an Apple manufacturing facility in Houston, a Wall Street Journal report claimed. There have to be “other solutions to the memory issue, but it’s not great American companies using Chinese memory.” When asked if he had relayed that message to Apple, Lutnick replied, saying “plainly.”​The comments come as demand for memory chips has increased sharply, driven in part by companies building artificial intelligence (AI) data centres. The resulting supply shortage has pushed up memory prices, adding to costs for consumer electronics companies. Apple has been testing memory chips made by Chinese companies CXMT and Yangtze Memory Technologies, according to people familiar with its efforts.Lutnick also noted that the US government would continue to push Apple to move more of its supply chain to the country.​“Relentlessly, more and more and more,” he added, describing the pressure. “They’ve built their supply chains on low-cost labour. And now they need to build a supply chain on advanced manufacturing. Can Apple do it? Of course they can.” “You’re going to see step by step, and piece by piece, they’re going to bring significant portions of their business home,” Lutnick continued.​

Apple rumoured to test Chinese memory chips amid supply shortage

​Apple’s chief operating officer, Sabih Khan, declined to confirm whether the company is testing Chinese memory chips. However, he said that given the scale of the shortage, “we have to look at all options,” including working with existing suppliers to increase production in the US. While Apple customises many components used in its devices, Khan said, “there isn’t a lot of customisation” involved in memory. The comments indicate that off-the-shelf memory chips could potentially be used in Apple devices.​Apple is free to buy off-the-shelf components from Chinese manufacturers, but US government rules require American companies to obtain a licence before sharing product information with CXMT and YMTC. Such information could be required if the companies were asked to manufacture customised memory chips for Apple. Laptop makers HP and Acer have already started using CXMT memory chips in devices sold outside the US, according to an earlier WSJ report.​

Trump administration pushes Apple on US chip manufacturing

The dispute adds another point of tension between Apple and the Trump administration, even as the company and government have highlighted cooperation on US manufacturing. Apple has been increasing its domestic investments while also maintaining a supply chain that remains concentrated in Asia. Idaho-based Micron Technology has urged the Trump administration not to allow Apple to use Chinese memory chips. The company has argued that such a move could affect domestic memory production and conflict with the administration’s efforts to expand semiconductor manufacturing in the US.​Senators from New York, Indiana and Idaho, where memory chip manufacturers have announced expansion plans, also wrote to Apple CEO Tim Cook in late July urging the company not to work with Chinese memory makers. “Reshoring semiconductor manufacturing is a top priority for President Trump, whose policies have already secured hundreds of billions of dollars of investments in this key sector,” White House spokesman Kush Desai said. “The Trump administration remains focused on delivering more investments and jobs for the American people while safeguarding our national security.”​

Apple faces pressure as memory shortage continues

Apple is not the only company seeking help as memory prices rise. Companies across industries, including medical devices and automobiles, have approached the administration over the supply shortage. However, expanding semiconductor production can take more than a year, limiting how quickly additional capacity can come online. The Trump administration has used tariffs and investment commitments to encourage companies to shift more manufacturing to the US. Apple has made several commitments in response, including spending tens of billions of dollars on US-made chips for iPhones and adding an assembly line for the Mac Mini in Texas.​The administration has also secured a deal for Intel to make some of Apple’s chips and an Apple commitment to manufacture all the cover glass for iPhones and Apple Watches in the US. Most of Apple’s supply chain remains in Asia, although the company has been expanding iPhone assembly in India through its contract manufacturing partners.​When asked about plans to bring iPhone production to the US, Khan pointed to Apple’s existing commitments, including spending tens of billions of dollars on chips made in the US and expanding manufacturing operations in Texas. He also said Apple was focused on helping chip manufacturers reshore their supply chains end to end.