Apple suspends use of Chinese company’s chips

Apple has halted plans to use memory chips from China’s Changjiang Memory Technology Company (YMTC), multiple sources told Nikkei Asia. The move comes as the US imposes the latest round of export controls on China’s technology sector, showing that Washington’s measures are having an impact on the supply chain.

There is no official comment from YMTC and Apple yet.

According to sources, Apple has already completed a months-long procedure to certify YMTC’s 128-layer 3D NAND flash memory for use in iPhones. However, when the US government announced tighter export restrictions on China earlier this month, their plans had to come to a halt.

NAND flash memory is a key component in all electronic devices, from smartphones and personal computers to servers. YMTC’s 128-layer chips are by far the most advanced by a Chinese manufacturer, though still a generation or two behind market leaders like Samsung Electronics and Micron.

Initially, Apple planned to use YMTC chips because they were at least 20% cheaper than rival companies’ chips, and only used for iPhones sold in the Chinese market. However, one source said Apple is also considering purchasing up to 40% of the NAND flash memory needed from YMTC for all iPhones.

Currently, YMTC chips are not used in Apple products.

Washington on October 7 placed the company YMTC on the “Unverified List”. One company was included in this list when US officials were unable to verify who the end users of their products were.

The move does not restrict US companies from purchasing components or anything else from the companies on the list, however, US companies are prohibited from sharing any design, technology, or documentation. or specifications for the listed companies without a license.

Furthermore, according to a senior Commerce Department official, companies added to the list are “likely” added to the “entity list” – the official export control blacklist.

YMTC is China’s hope of breaking into the field of NAND flash memory, which has long been dominated by a handful of companies, namely South Korea’s Samsung and SK Hynix, Japan’s Kioxia and Micron of America.

Founded in 2016, YMTC is now ramping up production at its second chip plant, which is expected to begin mass production this year. The company’s potential deal with Apple is seen as a big win for China’s semiconductor business, as it will demonstrate the ability of Chinese companies to deliver quality products to brands. leading global.