Apple Freezes Plans To Use China’s YMTC Chips – Nikkei
Last Updated on: 19th October 2022, 11:40 am
Apple has put on hold plans to use memory chips from China’s Yangtze Memory Technologies Co. (YMTC) in its products, after Washington imposed tighter export controls against Chinese technology companies.
The decision comes after the U.S. government stepped up its scrutiny of Chinese tech firms, including YMTC, over concerns about national security.
Apple had been in talks to use the chips in upcoming products, but the company has now suspended those plans.
“We have decided to delay our adoption of these products while we continue to evaluate the numerous concerns that have been raised,” an Apple spokesperson said in a statement.
Apple’s plan to start using state-funded YMTC memory chips in its iPhones this year has been frozen, according to reports from Japan’s Nikkei. The news comes as a surprise given the chips were initially planned for use only in iPhones sold in China.
Plan Comes Amid Political Tensions Between The U.S. & China
The decision to pause the plan comes amid political tensions between the U.S. and China. The two countries have been engaged in a trade war which has led to tariffs being placed on each other’s products. This has made it challenging for Apple to source components from Chinese manufacturers.
Apple has frozen plans to use China’s YMTC chips in its iPhones, according to the Nikkei newspaper. The company is said to be considering eventually purchasing up to 40% of the chips needed for all iPhones from YMTC, the newspaper said.
Analysts believe that YMTC is among the smaller companies that provide memory chips to Apple and it will see little to no effect from the move. The company is currently the only supplier of such chips for Apple’s iPhones.
Apple has long been criticized for its reliance on Chinese manufacturers for crucial parts of its products. Earlier this year, the company was reported to be in negotiations to purchase more than $10 billion in goods from Chinese companies. The moves were seen as a way to try to improve its relationship with Beijing, after several high-profile clashes with the Chinese government.
Apple is reportedly moving production of its upcoming Airpods to Vietnam and India, limiting its supplier base to domestic China players, and increasing its cost profile over time.
This move comes as Apple is facing pressure from competitors like Google, which is diversifying its supplier base to include domestic China players, and improving its cost profile over time.
The bigger implication of this news is that it limits Apple from potentially further diversifying its supplier base by utilizing domestic China players and improving its cost profile over time.
United States Of Copyright & Patent Infringement
Apple last week added China’s top memory chipmaker YMTC and 30 other Chinese entities to a list of companies that U.S. officials have been unable to inspect, ratcheting up tensions with Beijing, starting a 60-day-clock that could trigger much tougher penalties.
The move comes after months of negotiations between U.S. and Chinese officials over how to resolve a dispute over intellectual property and trade allegations. The United States has accused China of unfair trade practices and intellectual property theft, while Beijing has accused the United States of copyright and patent infringement.
Apple has announced that it will no longer use processors made with chips from Chinese manufacturer YMTC. This decision follows a broad crackdown by the Biden administration on exports of technology to China, which is designed to slow Beijing’s technological and military advances by cutting the country’s supplies off from certain semiconductor chips made anywhere in the world with U.S. equipment.
The move was made in response to China’s controversial efforts to develop its own semiconductor industry, which Beijing has argued is needed in order to create jobs and bolster the country’s economy. Critics of the crackdown say that it risks stifling innovation and hurting U.S. competitiveness in the global semiconductor market.
Apple has abandoned plans to use China’s YMTC chips in its products, following objections from the US government.
The iPhone maker had been in talks with YMTC to use its chips in future products, but these have now been stalled.
Apple has cited US concerns over the company’s surveillance practices as the reason for the decision.
The US has been in a dispute with China over its spying activities, and this has led to tensions between the two countries.