Plans by Apple to buy up to 40% of iPhone flash memory chips from Chinese company YMTC have reportedly been abandoned after the US government imposed export controls on the chipmaker.
It’s reported that the Cupertino company had a two-step plan for purchasing memory chips from the Chinese company Yangtze Memory Technologies Co …
iPhone flash memory plans
iPhone flash storage chips are one of the ways in which Apple achieves its enviable margins, the company typically charging $100 for each step up in capacity.
Apple currently buys a high proportion of these chips from two Japanese companies, Western Digital and Kioxia, with additional supplies from Samsung and SK Hynix. It was reported back in March that Apple planned to add a Chinese supplier to the list, for the first time ever.
The iPhone maker is now testing sample NAND flash memory chips made by Hubei-based Yangtze Memory Technologies Co., [sources] said, asking not to be identified discussing private deliberations. Apple’s been discussing the tie-up with Yangtze, owned by Beijing-backed chipmaking champion Tsinghua Unigroup Co., for months though no final decisions have been made.
Some considered this a controversial plan at the time, not only increasing rather than decreasing Apple’s dependence on China, but also coming at a time when the US administration was unhappy with China’s ambiguous stance on the Russian invasion of Ukraine. Unlike most countries, China had not condemned the invasion and occupation, and the country did not freeze assets or impose sanctions banning the import of Russian products.
Chinese purchase plans on hold
Nikkei has a little more detail on Apple’s plans, which it says have now been placed on hold.
It says the first step would have been to use YMTC flash storage chips for all iPhones destined for the Chinese market, while a longer-term plan would have seen Apple buy enough of the chips for 40% of global iPhone production. It reports that these plans have now been frozen.
Apple has put on hold plans to use memory chips from China’s Yangtze Memory Technologies Co. (YMTC) in its products, multiple sources told Nikkei Asia.
The move comes amid the latest round of U.S. export controls imposed against the Chinese tech sector and is a sign that Washington’s crackdown is creating a chilling effect down the supply chain.
Earlier this month, the US government added YMTC to a list of “unverified” Chinese companies, meaning that US officials have been unable to carry out checks to ensure that the chipmaker is not supplying Huawei. The Chinese telecoms company’s products have been banned in the US after spy-chip allegations.
The US restrictions also mean that American companies cannot sell any equipment to YMTC.
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