Apple Inc. was reported on Monday to have postponed using memory chips from China state-owned Yangtze Memory Technologies Corp. (YMTC) in its devices after the US levied stricter export restrictions on Chinese tech firms.
Sources with knowledge of the matter said the Cupertino, California-based company initially aimed to utilize YMTC’s NAND flash memory chips as soon as this year.
Apple was considering buying 40% of the chips, which were originally intended for the iPhones offered in the Chinese market, from the Wuhan-based firm.
US Export Controls Put Pressure on YMTC
Apple’s move came after the US included YMTC, China’s leading chipmaker, and 30 other Chinese companies, among the ‘unverified’ entities that have not undergone end-user checks by officials of Washington.
Such a decision intensifies the conflict between the two countries and has provided the firms with a 60-day deadline that may result in more serious consequences if they fail to complete the inspection on time.
If YMTC is unable to complete the audit, it may be added to the US’s ‘entity list,’ barring US firms from providing the state-owned chipmaker with technology for its less advanced chips.
Analyst Brady Wang stated that YMTC can still use and supply chips, considering it has stored materials and components. However, having no access to new equipment would make it challenging for the semiconductor manufacturer to expand its production.
Moreover, the US Commerce Department has placed YMTC under scrutiny for allegedly breaching the country’s export controls by selling NAND chips to Chinese telecom group Huawei Technologies Co. Ltd., which Washington has blacklisted from buying US technology for 5G smartphones.
The extensive export restrictions on China, introduced by President Joe Biden’s administration, were created to keep Beijing from utilizing US tech to aid in its technological and military programs by severing semiconductor chips produced anywhere in the world with US resources.
