Apple just froze its original plan to use China’s YMTC NAND flash memory chips in their iPhones!
Apple Freezes Use Of China’s YMTC NAND Chips!
On Monday, October 17, 2022, Nikkei Asia (paywall) reported that Apple just froze its original plan to use NAND flash memory chips from Yangtze Memory Technologies Corporation (YMTC)!
Apple had originally planned to start using NAND flash memory chips manufactured by YMTC in iPhones manufactured for the Chinese market, eventually purchasing up to 40% of its chip requirements from the Chinese state-funded company.
Those plans had to be put on hold after the US government announced stricter technology export controls designed to block China’s access to advanced semiconductor technologies.
The United States added YMTC – China’s top memory chipmaker – and 30 other Chinese companies to its “Unverified List” of companies that its official are unable to inspect to ensure compliance with its export controls.
The United States also initiated a new 60-day deadline for entities under the “Unverified List” to allow for complete end-to-end inspections, or risk even tougher penalties if added to the infamous “Entity List“.
YMTC is also being investigated by the US Commerce Department over allegations it violated earlier United States export controls by selling chips to HUAWEI, which was blacklisted under the Trump Administration.
Read more : US Targets Chinese Military With New Chip Export Ban!
Apple Decision Stymies Earlier Preparations By YMTC
Apple’s decision to freeze its purchase of YMTC flash memory chips stymies earlier preparations by the Wuhan-based memory chipmaker to mitigate looming US export controls.
According to four employees who spoke to Financial Times, YMTC had been stockpiling foreign equipment for months after US lawmakers started urging the Biden Administration to punish it for helping the Chinese military and violating trade restrictions by supply HUAWEI with chips.
YMTC has also come under scrutiny over concerns that massive Chinese government subsidies allow it to sells its chips below market price, even at a loss, just to gain market share at the expense of other companies.
We’ve been doing everything possible beforehand to support existing production lines, such as stockpiling all kinds of equipment.
– Senior YMTC engineer
Read more : Did China Make 7nm Chips In Spite Of US Sanctions?!
All that preparation was for naught, because Apple’s decision to freeze its massive purchase of YMTC flash memory chips is only the tip of the iceberg.
Other companies will similarly be forced to freeze or cancel their purchase of YMTC chips unless YMTC acquiesces to comply with audit requirements by US officials – a step the Chinese chipmaker is (politically) incapable of taking.
YMTC is, after all, China’s largest memory chipmaker, and a national champion in the country’s drive to build a domestic chip industry. It received 220 billion yuan (over $30.5 billion) in funding from both the Hubei province, and a national fund.
After the Biden Administration announced new chip export restrictions, the top three US chip toolmakers – KLA Corporation, Lam Research and Applied Materials immediately stopped sales and services to YMTC.
Despite its earlier stockpiling efforts, one YMTC employee revealed that the company only had enough wafers and parts for equipment repairs to last a year, but that’s assuming it won’t need technical support from foreign companies.
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