Tim Hardwick
Apple will approach Samsung for iPhone memory ahead of US export controls on one of China's leading NAND flash chip makers, according to DigiTimes.
Apple originally intended to purchase 128-layer 3D NAND flash memory chips from Yangtze Memory Technologies (YMTC) for use in iPhones sold in the Chinese market as early as this year, with the option to eventually purchase up to 40% of the chips needed for all iPhones.
These plans were put on hold last month, however, when YMTC and 30 other Chinese companies were added to an “unverified” list of companies that US officials were unable to verify and the supplier is expected to be blacklisted in early December due to trade restrictions.
U.S. companies are prohibited from sharing any design, technology, documents or specifications with companies on the Unverified List without a license. Companies that fail to provide the required information within 60 days may be blacklisted by the US Export Control. YMTC is also being investigated by the US Department of Commerce for whether it violated Washington's export controls by selling chips to already blacklisted Huawei.
As a result of the restrictions, Apple will now use Samsung Electronics as an alternative supplier. starting in 2023, according to supply chain sources cited in the report.
Samsung, a longtime main supplier of DRAM chips for the iPhone, will start shipping NAND next year. flash memory for iOS devices at a factory in Xi'an, China, which currently accounts for 40% of the Korean supplier's total 3D NAND flash capacity (from 128 to 176 layers), sources say.
Unlike its competitors, Samsung hasn't cut production in response to sluggish demand in the NAND flash market, likely in part because of its entry into Apple's supply chain. In addition, it is believed that the Korean manufacturer can afford to reduce quotas and increase production volumes, which further increased its competitiveness.
China's export controls imposed by the Biden administration are an attempt to slow the country's technological and military progress by cutting off shipments to Beijing of certain US-made semiconductor chips anywhere in the world.
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