00:00The Trump administration warned Apple against using Chinese-made memory semiconductors.
00:04According to a report by the Wall Street Journal, Howard Lutnick, the U.S. Secretary of Commerce,
00:09visited Apple's manufacturing facility in Texas and said in an interview with reporters that the
00:13Trump administration does not support it. He stated that there should be another solution
00:17to the memory issue, but great American companies should not be using Chinese-made memory.
00:22When asked if he had conveyed this opinion to Apple, Secretary Lutnick emphasized that he
00:26had clearly warned Apple. In effect, the Trump administration has issued a warning to Apple.
00:31Previously, the Trump administration had no clear stance on Apple's actions, but this
00:36recent shift is expected to hinder Apple's use of Chinese-made memory. First, let's take a look
00:42at what exactly Apple has done. Right now, Apple is in quite a crisis. Currently, in the global
00:47semiconductor market, competition among companies trying to build AI data centers is ongoing,
00:52and as a result, the demand for memory is rapidly increasing. AI servers require high-performance
00:57memory for large-scale computations, and the share of high-value-added products like HBM is rising.
01:04Accordingly, memory manufacturers are focusing their production capacity on AI-related products,
01:08which is also affecting their ability to supply general memory used in smartphones and PCs.
01:13For Apple, this situation is even more burdensome. To mass-produce products like the iPhone and MacBook,
01:19Apple needs to secure a huge amount of memory reliably every year. If they can't secure the
01:24desired quantity at the right time, it could affect their production schedule and cost management.
01:28Additionally, memory production can't be quickly expanded when demand rises. Building new production
01:34facilities and installing equipment requires substantial time and money, making it hard to
01:40quickly address sudden supply shortages. However, since Apple doesn't have its own memory semiconductor
01:45production facilities, it has to secure a supply of memory semiconductors somehow.
01:50Apple, aiming to boost its operating profits, tried partnering with China and tested memory chips
01:56from China's Changshin memory. Reports indicate Apple isn't just testing them, but has also started
02:02an initial supply agreement to get general-purpose memory from Changshin memory. As a result,
02:07there are growing voices of concern even within the United States. Right now, Changshin memory has been
02:12designated as a company linked to the Chinese People's Liberation Army and is already on the U.S.
02:17government's watch list. But as Apple tried to partner with Changshin memory, public opinion within
02:21the United States was on the verge of an uproar. On top of that, Apple even started lobbying
02:27extensively so that the U.S. could import Chinese-made memory. It seems that the Trump administration
02:31managed to block this appropriately. Of course, there are also other interpretations regarding the
02:35background of Apple's push to negotiate with Changshin memory. In fact, some analysts believe that,
02:40rather than aiming to introduce Chinese-made memory on a large scale, Apple's real intention is to
02:45bring in a Chinese company as a new potential supplier to secure more favorable terms in price
02:50negotiations with its existing memory suppliers. For Apple, just having Changshin memory as an option
02:55in addition to existing suppliers like Samsung Electronics, SK Hynix, and Micron gives them one
03:01more card to play during negotiations. Especially since Apple is a company that purchases large quantities,
03:06even a slight decrease in memory prices can have a significant impact on the overall product cost.
03:12Some speculate that negotiating with Changshin memory may be a tactic to pressure current suppliers
03:18to reduce prices. Micron was one of the companies that reacted most strongly to this move. From
03:23Micron's perspective, if Apple actually adopts Chinese-made memory, it could help Chinese companies
03:29secure global customers and could also put pressure on the U.S. memory industry. They say this would
03:34quickly harm U.S. national interests. Especially if Apple uses the possibility of using Chinese-made
03:40memory as a negotiation tool, existing suppliers could face price pressure or other forms of
03:45pressure. So it's a situation where Micron has no choice but to react sensitively. A new variable
03:50has emerged, differing from Apple's expectations. Reports say Changshin memory has not responded to
03:55Apple's pricing or other demands. For Changshin memory, there isn't much need to offer Apple a
04:01particularly low price. This is because there is high demand for memory within China, and the supply
04:07for local big tech companies is also insufficient. Here, there's no reason to keep supplying Apple at
04:13a lower price as it would cut profitability. Apple sought a new supplier to boost its bargaining power with
04:18current companies, but since Changshin memory didn't compete on price as much as Apple wanted,
04:23the situation has become more complicated. Additionally, the U.S. government has publicly opposed using
04:28Chinese-made memory, creating an unexpected burden for Apple during negotiations. For Apple,
04:34its attempt to diversify its supply chain has instead resulted in burdens from both the U.S.
04:39and China. They've really been singled out. It's understandable, as Apple has previously
04:45tried to partner with China. Back in 2022, Apple conducted significant technical verification work
04:50to ensure that the semiconductors from Yangji memory technology met Apple's strict quality standards.
04:56But when the news about this supply cooperation came out, there was a strong backlash from the
05:00U.S. political circles. Both the Democratic and Republican parties were up in arms. It got to the
05:05point where even the U.S. Congress was ready to step in over Apple's playing with fire. After that,
05:09Apple had no choice but to suspend its cooperation with Yangji memory. But now, less than five years
05:14later, they're doing something similar again, so it's understandable that the U.S. government would be
05:19very upset. Now, even U.S. political circles are directly pressuring Apple. It is reported that six
05:25U.S. senators sent a letter to Apple demanding a promise not to use semiconductors from China's
05:30Changzin memory technologies and Yangji memory technologies. U.S. political circles worry about
05:35more than just the price or quality of Chinese-made memory. They also worry these companies' ties to
05:40China's semiconductor industry could affect U.S. national security and supply chain policies. In particular,
05:46what's notable about this letter is that it even set a clear deadline for Apple's response.
05:50The lawmakers demanded that Apple state by August 21 that it will not use semiconductors from China's
05:55Changzin memory and Yangzi memory from using semiconductors from China's Changzin memory and
06:00Yangzi memory. It's essentially an ultimatum. U.S. politicians setting a deadline and demanding a
06:05response on a company's supply chain decisions highlights how sensitive they consider this issue.
06:10Apple's actions have sparked a stronger response from politicians, as the company is now actively
06:15negotiating to use Chinese-made components, not just reviewing the option. Moreover, it's important
06:20to note that concerns about this issue are being raised across the U.S. political spectrum,
06:23regardless of party affiliation. Opponents say that using Chinese-made semiconductors in Apple
06:28products sold in the U.S. could still boost Chinese semiconductor companies' production and sales.
06:34Because Apple has such a huge influence on the global supply chain, even if the actual usage is
06:39limited, it could still boost the credibility and customer base of Chinese companies in the global
06:43semiconductor market. Apple now faces challenges making decisions based only on corporate supply
06:48chain options. Depending on what position Apple presents to U.S. political circles by August 21,
06:53discussions about introducing Chinese-made memory could grow larger in the future or, conversely,
06:58move in the direction of reducing negotiations. The very fact that the U.S. political circles have even
07:03presented a specific deadline shows that the issue of Apple introducing Chinese-made semiconductors has
07:08become a highly sensitive political matter in the United States. So what would happen if Apple
07:13actually decides to adopt Changshin Memory's commodity memory? Chinese memory firms have mostly grown by
07:19serving the domestic market and a few clients. But if Apple becomes a customer, things could change.
07:24Apple is one of the most influential IT companies in the world, and simply being included in Apple's
07:29supply chain can be seen as recognition of a certain level of quality and production capability in the
07:34global market. If this occurs, other global IT companies might also consider using Chinese-made
07:40memory. In fact, in a situation where memory supply shortages and price increases continue, companies
07:45looking to reduce costs and diversify their supply chains may be able to secure new suppliers. Doing
07:51business with Apple is also very important for Changshin Memory. They've opened a route into the U.S.
07:57market, allowing for deeper penetration. If this continues, it could shift the bargaining power of
08:02Samsung Electronics, SK Hynix, and Micron. A few companies have dominated the market so far,
08:08but if a new major supplier emerges, customers will have more choices. That's why the U.S. government
08:14views this as more than just business between companies. The United States now sees the advanced
08:20semiconductor supply chain as tied to national security. The U.S. thinks large orders from American
08:25firms to Chinese memory companies could speed up China's semiconductor industry growth. Therefore,
08:30there is a possibility that the U.S. government will continue to pressure Apple. This is an issue
08:34that could go beyond pressure and even lead to sanctions. If Apple went ahead and did it, even
08:38after Congress and the government told them not to, they might tear Apple apart. When it comes to
08:43national security issues, in the U.S., both parties are united. Apple may have aimed for more than just
08:48memory chips, possibly seeking more suppliers to lower costs and strengthen bargaining power in the
08:53memory supply chain. But this time, that choice prevented them from getting the price they wanted in
08:58China and brought political pressure in the U.S. It seems that Apple is truly facing a crisis now.
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