Apple to abandon use of Chinese chips in iPhone due to US directive

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Apple to abandon use of Chinese chips in iPhone due to US directive

Robert Besser
19 Oct 2022, 20:27 GMT+10

After Washington imposed tighter export controls on Chinese technology companies, U.S. tech giant Apple has postponed plans to use memory chips from China’s YMTC in its products
Apple had originally planned to start using state-funded YMTC’s flash memory chips as early as this year, but only for iPhones sold in the Chinese market
CFRA Research analyst Angelo Zino said that the decision could prevent Apple from potentially diversifying its supplier base, by utilizing domestic China players and improving its cost profile in the long-term

TOKYO, Japan: Nikkei news has reported that after Washington imposed tighter export controls on Chinese technology companies, U.S. tech giant Apple has postponed plans to use memory chips from China’s Yangtze Memory Technologies Co. (YMTC) in its products.

Apple had originally planned to start using state-funded YMTC’s flash memory chips as early as this year, but only for iPhones sold in the Chinese market, the newspaper added.

Apple was also weighing eventually purchasing up to 40 percent of the chips needed for all iPhones from Yangtze Memory Technologies, Nikkei said.

CFRA Research analyst Angelo Zino said that the decision could prevent Apple from potentially diversifying its supplier base, by utilizing domestic China players and improving its cost profile in the long-term.

Additionally, Apple is moving more production to Vietnam and India for products, such as Airpods and new iPhones.

Last week, the U.S. added China’s top memory chipmaker, Yangtze Memory Technologies and 30 other Chinese companies, to a list of companies that U.S. officials have been unable to inspect, increasing tensions with Beijing and starting a 60 day-deadline that could trigger much tougher penalties.

The export controls adopted by the Biden administration aims to slow Beijing’s technological and military advances, by cutting off supplies from semiconductor chips made anywhere in the world with U.S. equipment.