Apple drops China’s YMTC as memory chip supplier amid US trade sanctions: Nikkei
- The suspension comes as the state-owned chip maker was set to become one of the NAND flash memory chip suppliers for Apple’s iPhones
- YMTC was added by Apple to its list of NAND flash suppliers for the iPhone 14 in September, according to report
Apple has suspended plans to use memory chips made by China’s largest memory chip maker Yangtze Memory Technologies Co (YMTC), after the company became the latest target of US trade sanctions on the country’s advanced semiconductor manufacturing industry, according to a Nikkei Asia report on Monday.
The suspension comes as the state-owned chip maker was set to become one of the NAND flash memory chip suppliers for iPhones this year. YMTC’s 128-layer 3D NAND flash memory had already completed the months-long verification process of the US tech giant for use in iPhones, according to the report, which cited multiple sources.
Apple and YMTC did not immediately respond to requests for comment on Monday.
If confirmed, the development would be a fresh blow for China’s top memory chip maker after it was put on a trade watch list by Washington.
China’s top memory chip maker replaces CEO amid US sanctions risk
The Bureau of Industry and Security, an agency under the US Department of Commerce, announced new export controls for China’s advanced semiconductor industry on October 7. These include restrictions on the involvement of “US persons” in developing chip facilities in China, and on equipment and materials shipped to Chinese wafer fabs that produce NAND flash memory chips with 128 layers or more.
YMTC, whose new chip has 232 memory cell layers according to Chinese state media reports, was among 31 Chinese entities added to Washington’s Unverified List on October 7.
While the export restrictions do not directly forbid US companies from using advanced chips made by Chinese companies in their own products, the knock-on effects of the US sanctions are wreaking havoc across China’s semiconductor supply chain.
YMTC was added by Apple to its list of NAND flash suppliers for the iPhone 14 in September, according to a report by South Korean media outlet BusinessKorea. Apple had previously been using NAND flashes made by South Korea-based Samsung Electronics, SK Hynix and Japan-based Kioxia.
The US tech giant had considered purchasing up to 40 per cent of the chips needed for all iPhones from YMTC, according to the Nikkei Asia report.
Marco Rubio, Republican vice-chair of the Senate intelligence committee, warned Apple that it would face intense scrutiny “like it has never seen from the federal government” if it used memory chips made by YMTC, which pose “security risks”, according to a September report by the Financial Times.
China’s memory chip champion YMTC stays mum amid threat of US sanctions
YMTC controlled 5 per cent of the global market for NAND flash memory chips in 2021, and its share had been expected to surpass 10 per cent by 2027, according to industry research firm Yole Development.
Meanwhile, YMTC has been grappling with other fallout from US sanctions. Several top chip-making tool providers, including wafer fab equipment supplier Lam Research, and KLA Corp, which supplies process control systems for the semiconductor industry, have pulled US engineers out of YMTC, according to a Wall Street Journal report last week, citing sources familiar with the matter.
