Apple Nixes Plans for Chinese YMTC Chips in iPhones: Report
News about components and peripherals
Shane Snider
Apple will abandon its plan to use cheaper memory chips from Yangtze Memory Technologies Co. after the US launched a new round of Chinese technology export controls.
Apple will delay plans to install memory chips from China’s Yangtze Memory Technologies Co. (YMTC) into future iPhone lines, The Nikkei was the first to report on Monday.
Apple completed the lengthy process of certifying YMTC’s 128-layer 3-D NAND flash memory for its iPhones as the US government launched a new round of tougher export restrictions that affected Chinese technology exports earlier this month, according to multiple sources cited by Nikkei Asia.
The scrapped plans will create a scramble to find a cost-effective alternative, as YMTC’s chips are about 20 percent cheaper than its leading competitors, including more advanced and far more expensive offerings from Samsung Electronics and Micron. These are the most advanced memory chips currently offered in China.
YMTC has been placed on an “unverified list” of companies that have not been vetted and US officials cannot verify end users. US companies are prohibited from sharing any designs, technologies, documents or specifications with companies on the “unvetted list” without a license.
Dan Ives, managing director and senior equity analyst at Wedbush, told CRN in an email that he’s not overly concerned about the potential financial impact on Apple. “This will be a limited impact that should not pose any major risks to Apple’s production or balance sheet. It is said to be a real fly for Cupertino,” he wrote.
Cost may have been a significant factor in Apple’s decision to stick with an older chipset with the entry-level iPhone 14 models—which analysts cite as a reason the company reduced production on those models. Apple has reportedly refused to accept a price increase from Taiwanese chipmaker TSMC, which plans to raise chip prices by 6 to 9 percent. TSMC makes the A16 and A15 chips used in the current iPhone lineup.
Earlier this month, the US Department of Commerce banned US companies from supplying certain classes of advanced chip equipment to any Chinese customer without a license. The ban signaled a new attempt to rein in semiconductor development in China. The same curbs will be applied to US-made electronics or other items that China might use to manufacture its own tools and chip-making equipment.
US officials called the move a national security effort. “We are doing everything in our power to protect our national security and prevent the military, intelligence and security services of the People’s Republic of China from acquiring sensitive technologies with military applications,” said Commerce Under Secretary for Industry and Security Alan Estevez. statement.
New sanctions on Beijing’s chip ambitions will have a ripple effect, experts say. “This will set the Chinese back years,” Jim Lewis, a technology and cybersecurity expert at the Center for Strategic and International Studies (CSIS), a think tank based in Washington DC, told Reuters. “China is not going to give up chip production, but this will really slow them down [down].”
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