Apple is actively lobbying to adopt Chinese memory chips to ease rising costs, while its key supplier Micron Technology is fighting to block the plan, according to a July 24 report. This tug-of-war has put President Trump in the middle of a conflict of interest between two major U.S. tech giants.
People familiar with the matter said that in recent weeks, Apple CEO Tim Cook and other company executives have been lobbying Trump, U.S. Commerce Secretary Howard Lutnick, Treasury Secretary Scott Bessent, and other officials to allow Apple to use memory chips from China's CXMT and YMTC in products sold outside the U.S. market.
Apple believes this move would help ease the global supply shortage of memory chips and could potentially lower prices for U.S. consumers on related products.
However, these arguments have been countered by Micron Technology, the only major memory chip manufacturer in the U.S. Sources say Micron CEO Sanjay Mehrotra and other executives have warned Lutnick and other government officials that allowing Chinese companies like CXMT to supply U.S. tech firms, regardless of the final sales region, could destroy the domestic memory chip industry, much like China's impact on the U.S. steel and manufacturing sectors.
In recent years, after the U.S. Department of Defense designated these Chinese companies as "Chinese military companies," Apple and other memory chip buyers have avoided using Chinese suppliers. Additionally, YMTC has been placed on the U.S. trade blacklist, the "Entity List."
This lobbying battle is likely to force Trump to choose between two key economic goals: reducing costs for U.S. consumers and boosting domestic semiconductor production to reduce reliance on other countries. Amid ongoing trade negotiations, Trump has avoided further restricting Chinese companies while also praising Apple and Micron for expanding their investments in the U.S.
Sources say Micron executives believe the company can alleviate the memory chip shortage by accelerating the construction of its U.S. factories and increasing domestic investment. Micron argues that rising prices for consumer electronics, including Apple products, are not solely due to higher memory chip costs.
Trump has expressed a desire to significantly boost U.S. chip production before leaving office.
White House Office of Science and Technology Policy Director Michael Kratsios told lawmakers this week, "Most importantly, we must build capacity in the U.S. Clearly, we do not want to do business with any company on the Entity List."
As one of the world's largest memory chip buyers, Apple has pressured Micron and its competitors for years to secure the lowest prices for key components in its devices. Meanwhile, memory chip makers rely on Apple's massive purchasing volume to keep their factories running at full capacity.
The negotiations between the two sides have been intense for years, with grievances deepening. Sources say that before becoming Micron CEO, Mehrotra led SanDisk, another Apple memory chip supplier. During his time at SanDisk, he developed a strong aversion to Apple, rarely meeting with the company. This animosity has persisted to the present day.
The AI revolution has changed this dynamic, giving Mehrotra more leverage. Large data center operators are buying memory chips in large volumes at higher prices, weakening Apple's bargaining power. TechInsights says the resulting supply shortage has quadrupled memory chip prices over the past year, with further increases expected, and shares of related manufacturers have surged.
Apple has expressed strong dissatisfaction, arguing that Micron's gross margin of over 80% is evidence of profiteering. The iPhone maker also claims that Micron is not reinvesting in capacity expansion quickly enough and that new capacity is being disproportionately allocated to AI customers. Industries such as medical devices and automotive have also asked the U.S. government for help alleviating the chip shortage.
Micron says it serves many industries and plans to invest $250 billion in the U.S. to expand capacity. A spokesperson said, "The strategic importance of advanced memory and storage has never been more pronounced." Micron executives say that customers like Apple have historically squeezed supplier profits during industry downturns, laying the groundwork for today's shortage.
A Chinese Foreign Ministry spokesperson has repeatedly emphasized that China firmly opposes the U.S. overstretching the concept of national security, creating various discriminatory lists, and unreasonably suppressing Chinese companies. We urge the U.S. to correct its wrongdoing and stop its unreasonable suppression of Chinese enterprises. China will take necessary measures to firmly safeguard the legitimate rights and interests of Chinese companies.
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