Apple Inc. is reportedly testing chips from a leading chipmaker that has been designated as a Chinese military company by the Trump administration, according to a new report.

The development comes as the global semiconductor shortage intensifies, with memory supply crunch being one of the major factors contributing to it.

The US government has classified China’s largest chipmaker, SMIC, as a ‘foreign entity’ that presents a national security risk due to its close ties with the Chinese military. However, Apple is said to be testing SMIC chips for use in its latest devices, despite these concerns.

This move has raised eyebrows among industry experts and investors, who are worried about the potential risks of using chips from a company that is seen as having close connections to China’s military establishment.

Apple did not immediately respond to requests for comment on the matter. However, the company has been looking to diversify its chip supply chain in recent years, with a focus on securing alternative sources outside of Asia.

The semiconductor shortage has had far-reaching impacts on various industries, including automotive and electronics. It is expected to continue affecting the market until at least mid-2023.

In the meantime, Apple is said to be working closely with other chipmakers, including those in Europe and the United States, to secure additional supplies of memory chips.

Shares of Intel Corp., which has been a major supplier of memory chips to Apple, rose by 4.5% on Monday after news of the company’s partnership with Apple broke. However, the stock remains under pressure due to ongoing concerns over the global chip shortage.

The situation highlights the complexity and uncertainty of the global semiconductor supply chain, which is critical for many industries.

Apple’s decision to test chips from SMIC has sparked debate among industry experts, with some arguing that it is a necessary move to address the memory supply crunch, while others have expressed concerns about the potential risks involved.

In related news, the US government has announced plans to invest $1.7 billion in the development of new chipmaking technologies at several US facilities, including those in Arizona and New Mexico. The initiative is aimed at improving the country’s competitiveness in the global semiconductor market.

The move is seen as a response to growing concerns over China’s growing dominance in the global semiconductor industry. The Trump administration has been critical of China’s involvement in the production of semiconductors, citing national security concerns and unfair trade practices.

Apple has faced criticism from some lawmakers and advocacy groups for its alleged ties to Chinese companies, including those in the technology sector. However, the company has maintained that it is committed to being transparent about its business dealings with Chinese entities.

The development comes as Apple prepares to launch a new line of iPhones this year, which are expected to feature advanced chip designs and improved performance capabilities. The company’s focus on diversifying its chip supply chain is likely to be closely watched by investors and analysts in the coming months.

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