Apple bows to pressure, drops plan to buy Chinese memory chips

Following increased US export controls against working with Chinese companies, Apple has halted plans to use YMTC chips in the iPhone.

Apple had been working to reduce its reliance on Japan for iPhone flash memory, and had reportedly begun the process of adding China's Yangtse Memory Technologies Co (YMTC). No YTMC chips have yet been used in iPhones, but now it's claimed that Apple has completely dropped its plans.

According to Nikkei Asia, YMTC flash memory is at least 20% cheaper than that of rivals, and the company's 128-layer 3D NAND chips are the most advanced by a Chinese company. They remain reportedly one or two generations behind the chips made by Micron and Samsung, both of which are known to be working with Apple.

Nikkei Asia claims that Apple had completed is months-long testing and verification. Political pressure and criticism from US policymakers made it abandon the plan.

"The products have been verified, but they did not go into the production lines when mass production of the new iPhone began," an unspecified source told Nikkei Asia.

Reportedly, the intention had been to initially use YMTC chips only for iPhones being sold in China. Another unnamed source, though, claimed that Apple was considering ultimately buying 40% of all its worldwide iPhone NAND flash memory from the company.

"YMTC is government-subsidized so they can really outprice competitors," said another source.

The new US export laws are part of the Biden Administration's aim to bolster American production of processors, as well as avoid potential security issues. The Administration had, though, been granting exemptions to certain companies in order to avoid creating a bottleneck in the industry.

Apple is not prohibited from buying from YMTC, but there are restrictions on US companies sharing design or technologies with companies that are on what's called the Unverified List. YMTC was added to the list on October 7, 2022, after it failed to provide the US with certain information about its end users.

40 Comments

entropys 13 Years · 4316 comments

About 2 years ago

All I can say is 利益

gatorguy 13 Years · 24627 comments

I don't know that it's as much "political pressure" as it's simply infeasible given YMTC being added to the list of Chinese companies not permitted to sell into the US market. Apple is so wealthy and powerful anymore that I doubt they care too much about what any government says they want them to do. They'll beat 'em back with money, lawyers, political friends, and lobbying and do what Apple corporate wants to do for the most part.

blastdoor 15 Years · 3594 comments

Excellent. Apple has the power to transform a laggard into a leader (see TSMC), so a decision like this by apple really matters. This is a great example of how more aggressive US policy can counter Xi’s anti-democracy crusade.

avon b7 20 Years · 8046 comments

blastdoor said:

Excellent. Apple has the power to transform a laggard into a leader (see TSMC), so a decision like this by apple really matters. This is a great example of how more aggressive US policy can counter Xi’s anti-democracy crusade.

US policy won't change that angle.

It's important to remember that Trump's number one reason for starting a trade war with China was the trade defecit. It wanted to increase sales to China.

The other angle to what was going on was the rise of China as a technological competitor (and with all the cards to eventually trump the US).

Standard moves by standard rules weren't working so Trump began using executive orders to make things happen.

Apple is well aware of that possibility and probably chose to put any plans it had on hold so as to avoid problems down the line.

Once the China has eliminated US technology from the problem supply lines I expect Apple will try again.

waveparticle 3 Years · 1497 comments

gatorguy said:

I don't know that it's as much "political pressure" as it's simply infeasible given YMTC being added to the list of Chinese companies not permitted to sell into the US market. Apple is so wealthy and powerful anymore that I doubt they care too much about what any government says they want them to do. They'll beat 'em back with money, lawyers, political friends, and lobbying and do what Apple corporate wants to do for the most part.

Wrong! Apple has obeyed numerous governments order removing apps from App Store.