Ternus Faces Pressure to Reconsider Apple's Chinese Chip Deal

Apple's new CEO John Ternus is facing pressure to drop the Chinese chip deal that his predecessor Tim Cook fought to keep. The deal in question involves a Chinese DRAM supplier, CXMT, which has been providing cheap memory chips for Apple's iPhones. However, this arrangement has come under scrutiny from U.S. policymakers, who are concerned about the impact on national security and the economy.

Cook had defended the deal, citing the high prices of memory chips in the market. He noted that 'for September, we expect to pay even higher memory costs' and that the market pricing for memory was continuing to increase. This has driven an increasing impact on Apple's business, with CFO Kevan Parekh stating that more than 100% of gross margin compression came from memory.

Now, with Ternus at the helm, there are concerns that he may be pressured to reconsider the deal and opt for a U.S.-based supplier instead. If this happens, it could have significant implications for Apple's supply chain and its relationships with other companies in the industry.