Under Biden's Pressure... Apple Puts Plans to Use Chinese YMTC Semiconductors in iPhone on Hold

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] On the 17th, Nikkei Asia reported that Apple has postponed its plan to equip iPhones with NAND flash memory produced by Chinese memory semiconductor company Yangtze Memory Technologies Co. (YMTC). Apple, which was pursuing cooperation with YMTC to reduce costs and diversify its supply chain, had to revise its plan due to facing semiconductor export controls imposed by the U.S. Biden administration on China.

Nikkei Asia cited multiple sources saying that Apple had already completed months-long procedures earlier this month to certify YMTC's 128-layer 3D NAND flash memory for iPhones. NAND flash is a memory semiconductor that retains stored information even when power is off, used in all electronic devices from smartphones and PCs to servers.

Sources said Apple had planned to install YMTC's NAND flash, which can be supplied at prices at least 20% cheaper than major competitors thanks to support from the Chinese government, in iPhones as early as this year. However, due to geopolitical risks and pressure from the U.S. Congress, Apple changed its policy direction. It is known that the semiconductors produced by YMTC were intended mainly for iPhones sold in the Chinese market.

One source also said Apple was considering purchasing 40% of the NAND flash needed for iPhones supplied worldwide from YMTC. "The product was verified, but once mass production of the new iPhone started, it did not enter the production line," said one source. Another source explained, "YMTC receives government subsidies, allowing it to price lower than competitors."

Earlier, on the 7th, the U.S. Department of Commerce announced export control measures that effectively ban U.S. companies from exporting semiconductor equipment to Chinese companies producing ▲ DRAM of 18nm (nanometers; 1nm is one billionth of a meter) or less ▲ NAND flash with 128 layers or more ▲ logic chips of 14nm or less. The U.S. Department of Commerce also released an 'Unverified List' (companies of export control concern), which included YMTC.

Nikkei Asia reported, citing a senior U.S. Commerce official, that companies on this list that fail to provide required information within about 60 days are likely to be officially blacklisted, restricting exports of semiconductors and semiconductor equipment.

Brent Fredberg, investment director at U.S. investment firm Brands Investment Partners, said, "Apple would want to use YMTC's products in the local Chinese market," but added, "Under current regulations, the possibility that YMTC will supply the NAND flash Apple wants for years is very low."

This content was produced with the assistance of AI translation services.