[Reporter’s Notebook] Apple Seeks Chips from China

"Introducing the new iPhone. Designed by Apple in California, manufactured in China, and approved under someone's tacit consent."

This satirical comment appeared on Reddit, the largest online community in the United States, after the Financial Times (FT) reported last month that Apple had lobbied the U.S. government to allow it to purchase DRAM chips made by Chinese company Changxin Memory Technologies (CXMT), which is on the U.S. Department of Defense blacklist. While some Apple supporters do exist, the general sentiment is, "At least not in my iPhone."

The fact that Apple is taking such a risky bet, even at the expense of its public image, highlights the seriousness of the situation. As the AI boom drives up demand for server memory in data centers, the supply allocated for consumer electronics has diminished.

According to IT expert Ming-Chi Kuo, there is a significant shortage of low-power DRAM (LPDDR) for smartphones, tablets, and laptops. As a result, Apple's procurement volume for the 'A20' chip in the second half of this year and into the first quarter of next year may fall short of its original target by 10 to 20 percent.

Wall Street consensus holds that Apple's lobbying efforts are unlikely to succeed. This is due to fierce opposition from hardline China hawks in the U.S. Congress, who warn it would be a "serious mistake," as well as real national security concerns.

Even if Apple manages to succeed in its lobbying, it is unlikely to secure sufficient supply. In its IPO prospectus, CXMT stated that its production capacity cannot even meet domestic demand. Even considering the "iPhone installed" halo effect, it is unlikely that suppliers with a relative advantage would lower their prices for Apple first.

It is an unfamiliar sight to see Apple, which has long dominated price negotiations with its purchasing power, courting a Chinese semiconductor company. Meanwhile, a senior executive at Micron Technology recently pointed out in an interview that the memory supply shortage is due to "long-term suppressed supply prices." This adds a meaningful note to the long-standing grievances within the semiconductor industry.

For Korea, a nation heavily reliant on semiconductors, this is, in some respects, a relief. However, no one knows when or how U.S. President Donald Trump might change his China policy to suit American interests. Furthermore, Apple CEO Tim Cook has been a strategist walking a diplomatic tightrope between the U.S. and China for over a decade. Korean companies and the government must also remain vigilant.

This content was produced with the assistance of AI translation services.