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The US House China committee chair has urged the Trump administration to ban US companies from buying memory chips from CXMT and YMTC to avoid reliance on China for critical components in AI infrastructure.
John Moolenaar, the Republican head of the panel, said he was “alarmed” that Apple and other US companies were trying to buy memory chips from the Chinese semiconductor makers amid a global shortage in 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 comes after the FT reported that Apple was lobbying the administration for clearance to buy chips from CXMT. The Pentagon this year put CXMT on its “Chinese Military Companies” blacklist. While that does not ban Apple from buying CXMT chips, it raises the political risk for the iPhone maker.
The lawmakers asked the administration to ban US firms from buying chips from any group on either the “Chinese Military Companies” list or the Commerce Department’s “Entity List”, which imposes licensing restrictions on the exports of US technology. They urged Lutnick to put CXMT on the entity list and tighten restrictions on YMTC, which is already on the list.
The FT reported last year that the Trump administration had prepared to put CXMT on the entity list but pulled back because of concerns that it would undermine trade negotiations with China.
The lawmakers asked the administration to work with Japan, Korea and the EU on a co-ordinated approach to stop CXMT and YMTC from “exploiting the global memory shortage to penetrate allied supply chains”.
The lawmakers said letting US companies buy memory chips from CXMT and YMTC would create a “permanent reduction in western memory manufacturing capability”, creating a “strategic dependency” on China at a time when AI was becoming critical to US military and economic power.
CXMT and YMTC specialise respectively in DRam and Nand — components used in devices ranging from smartphones to data centres. Both were founded to reduce China’s near-total reliance on foreign suppliers.
Their profiles have risen this year as the industry faces an intense supply crunch triggered by the AI infrastructure boom. The three main global DRam suppliers — Micron, Samsung and SK Hynix — have pledged hundreds of billions of dollars in investment in new production capacity.
For the moment, CXMT and YMTC primarily supply the Chinese market. Both have been impacted by existing US restrictions on semiconductor manufacturing equipment exports, which have prevented them from reaching the same level of manufacturing complexity as international rivals.
But their rapid growth and heavy investments have led analysts to assess that they will start to have a meaningful impact on global memory prices within the next couple of years.
