Apple abandons its plan to use Chinese YMTC 3D NAND chips as it faces political pressure
YTMC has lost itself a major customer
Published: 18th October 2022 | Source: Nikkei Asia |
Apple moves away from China-backed NAND maker following political pressure
According to sources from Nikkei Asia, Apple has put on hold the company's plans to utilise 3D NAND from Yangtze Memory Technologies Co. (YMTC), a Chinese memory manufacturer.
YTMC is a NAND manufacturer that is backed by the Chinese government, and while their technology is considered to be several generation behind memory giants like Samsung, their latest TLC memory with their Xstacking 3.0 six-plane architecture can deliver I/O speeds of 2400 MT/s. Apple considers these speeds good enough for their purposes, mostly due to the fact that they could source this NAND at prices that are said to be more than 20% cheaper than what is available the NAND market's leaders (Samsung and Micron).
Because of their plans to utilise NAND from a Chinese Communist party (CCP) backed chipmaker, Apple has seen growing political pressure from the US government. This has forced Apple to abandon their contracts with YMTC, which means that Apple will have to source their NAND for future iPhones, iPads, and Mac computers from other manufacturers.
Originally, Apple planned to utilise YMTC NAND for iPhones that were destined for the Chinese market. Allegedly, Apple had also considered buying as much as 40% of their NAND chips for all iPhones from YMTC. YMTC's government support allows the company to outprice their competitors, artificially growing China's semiconductor market.
On October 7th, the US government placed YMTC on a so-called "Unverified List", and US companies are prohibited from sharing any design technologies, documents, or specifications with companies on this list without a license. A U.S. Commerce Department official also told Nikkei that YMTC is also likely to be added to the "Entity List", a blacklist that controls the export of their technology to the US. YMTC has also been hit by export controls that are designed to harm China's semiconductor market, restricting US equipment manufacturers from providing their products, services, or technical support to Chinese companies that would help them produce advanced chips.
With the US' latest restrictions taking effect, YMTC's capacity to grow has been greatly diminished. This will prevent YMTC from producing NAND in the quantities that Apple desires, even if Apple were able to utilise their NAND for products that will be sold outside of China.
YMTC's deal with Apple would have been a big deal for China's technology sector, though the end of the deal will not impact Apple negatively. Apple can easily get its NAND from other manufacturers. The only difference is that Apple will have to pay higher prices for these NAND chips.
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