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Apple's potential partnership with YMTC alerts US lawmakers

Misha Lu, DIGITIMES Asia, Taipei 0

In response to the recent news that Apple is to source 3D NAND flash produced by the Chinese company Yangtze Memory Technologies Corp. (YMTC) for its latest iPhone 14 smartphones, US lawmakers have warned that the California-based company will face intense scrutiny, as Financial Times reported.

US senator Marco Rubio, who is also the vice-chair of the Senate intelligence committee, accused Apple of "playing with fire". According to Rubio, Apple "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, however, clarified that it was not considering using YMTC chips for iPhones sold outside of China, telling the Financial Times that it was "evaluating sourcing from YMTC for NAND chips to be used in some iPhones sold in China."

According to BusinessKorea, Apple is highly dependent on South Korea for NAND flashes and DRAMs. It has so far sourced NAND flash chips from Samsung, SK Hynix, and Kioxia, while its DRAMs also come from Samsung and SK Hynix. The cooperation with YMTC is perceived as Apple's attempt to lower the prices of NAND flashes. However, YMTC is partially state-owned, with the Chinese government holding 24% of the stake in the company. Back in July, a group of US senators already called for YMTC to be put on the entity list, accusing it of violating export control rules by supplying memory chips to Huawei. In addition, governmental subsidies received by YMTC have become a source of major concern for US lawmakers, fearing its impacts on the global memory chip industry and subsequently the security of global data storage.

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