US lawmakers learned of reports that Apple is considering using chips from the Chinese state-owned chipmaker, Yangtze Memory Technologies Company (YMTC), for its iPhone 14 lineup leading the lawmakers to threaten Apple with increased scrutiny from Congress. Apple responded quickly with a statement asserting it has no plans to sell iPhones with YMTC chips outside of China. The lawmakers main concern with YMTC are reports claiming YMTC has close ties to the People’s Liberation Army (PLA).
According to Yole Development, YMTC has grown from 1% of global market share for NAND memory chips in Q1 2020 to 5% as of the middle of 2022 and is on track to reach 13% market share by 2027, according. The White House reports that YMTC has even received around US $24 billion in subsidies from Chinese government sources, which, the White House said, was essential to the firm’s rapid development. Four senators and other colleagues urged Commerce Secretary Gina Raimondo to place YMTC on the Department’s export blacklist, because it was supplying companies under US sanctions.
Apple currently uses NAND flash from Korean giants Samsung and SK hynix, as well as Japanese producer Kioxia. In addition, it also buys RAM from SK hynix and Samsung, making its supply chain heavily reliant on Korea. Here is an opinion piece we found of interest relating to Apple evaluating using YMTC chips.
US lawmakers warn Apple on using Chinese group’s chips in new iPhone
In an opinion piece “US lawmakers warn Apple on using Chinese group’s chips in new iPhone” for Financial Times, Demetri Sevastopulo, correspondent, and Patrick McGee, correspondent, discuss a media report that Apple was considering adding Yangtze Memory Technologies Co (YMTC) to its list of suppliers for Nand flash memory chips that are used to store data on smartphones. The authors report that this has legislators very alarmed.
“Apple is playing with fire,” Marco Rubio, Republican vice-chair of the Senate intelligence committee, told the Financial Times. “It knows the security risks posed by YMTC. If it moves forward, it will be subject to scrutiny like it has never seen from the federal government. We cannot allow Chinese companies beholden to the Communist party into our telecommunications networks and millions of Americans’ iPhones.”
Apple told Financial Times that it did not use YMTC chips in any of its products, but it was simply evaluating using the chips in some iPhones sold in China, adding it was not considering using YMTC chips in phones for sale outside China. In addition, Apple said that all user data stored on Nand chips used by the company were “fully encrypted”. Read the full article on Financial Times.
Disclosure: Fatty Fish is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
The Fatty Fish Editorial Team includes a diverse group of industry analysts, researchers, and advisors who spend most of their days diving into the most important topics impacting the future of the technology sector. Our team focuses on the potential impact of tech-related IP policy, legislation, regulation, and litigation, along with critical global and geostrategic trends — and delivers content that makes it easier for journalists, lobbyists, and policy makers to understand these issues.
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