Trump team urges Apple to avoid Chinese memory chips amid trade tensions: Report

The Trump administration has told Apple that it does not want the company to buy memory chips from Chinese manufacturers, Commerce Secretary Howard Lutnick said, according to The Wall Street Journal.

Lutnick said the administration had clearly conveyed its position to Apple and wants the company to explore alternatives.

“The Trump administration is not in favour of that,” Lutnick said, according to the WSJ. He added that there have to be “other solutions to the memory issue, but it’s not great American companies using Chinese memory.”

Apple has been testing memory chips made by Chinese companies CXMT and Yangtze Memory Technologies, people familiar with the matter told the WSJ. The company could potentially use the chips in devices sold in China.

Apple weighs options amid chip shortage

US rules require American companies to obtain a licence before sharing product information with CXMT and YMTC. The Chinese companies would need such information to make customised chips for Apple.

However, Apple can buy ready-made chips from the companies and negotiate prices with them, according to the WSJ.

Apple Chief Operating Officer Sabih Khan declined to confirm whether the company was testing Chinese memory chips. He said the supply shortage meant “we have to look at all options,” including working with existing suppliers to increase US production.

Khan also said there “isn’t a lot of customisation” involved in memory chips, suggesting Apple could use standard Chinese memory components.

Trump pushes Apple to expand US manufacturing

The issue has added to tensions between Apple and the Trump administration, even as both sides promote cooperation on expanding manufacturing in the US.

Apple has taken steps to increase domestic production while seeking tariff relief from President Donald Trump. However, most of its supply chain remains in Asia.

“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.

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Apple faces pressure to bring supply chains home

The administration has used the threat of higher tariffs to encourage companies to move supply chains to the US. Apple has promised major domestic investments but has provided limited details on how much will go towards new manufacturing.

The administration has secured a deal for Intel to make some Apple chips and an Apple commitment to produce all iPhone and Apple Watch cover glass in the US.

“Relentlessly, more and more and more,” Lutnick said about the pressure on Apple.

“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 said.

Apple is also working with contract manufacturers to build new iPhone assembly plants in India.