Apple has suspended the plan to use NAND memory chips from China’s state-owned Yangtze Memory Technologies Co. (YMTC) in its products.
According to Nikkei Asia, the tech giant made the withdrawal decision due to geopolitical pressure and criticism from U.S. policymakers.
Apple initially intended to use YMTC’s memory chips early this year in its iPhones because the prices are more affordable than those of rivals. However, a supply chain expert said that YMTC’s chips are at least 20% cheaper than its competitors.
Sources told Nikkei Asia that “YMTC is government-subsidized, so they can really outprice competitors.”
The White House announced last June that YMTC had received $24 billion from the Chinese regime for rapid development.
The company also planned to use YMTC’s chips only for iPhones sold in the Chinese market to avoid scrutiny from U.S. lawmakers.
The move comes after the U.S. announced earlier this month its latest export restrictions on advanced chip-making equipment to China to curb its access to cutting-edge American technologies.
Bloomberg reported that following the ban, major U.S. tech firms Applied Materials, KLA, and Lam Research, began withdrawing their staff from YMTC.
In addition, YMTC was placed on the unverified list by the U.S. Commerce Department along with 30 other Chinese companies. Those firms on the list will be restricted from buying U.S. technology.
Last month Nikkei Asia reported that a team of U.S. senators asked the nation’s top security officials to examine the potential risks of Apple’s plan to use YMTC’s memory chips for its new iPhone 14.
On September 21, Senator Marco Rubio, the Senate Intelligence Committee vice chairman, and a group of lawmakers sent a letter to Director of National Intelligence Avril Haines. The letter raised extreme concerns about possible global supply chain security threats from using YMTC’s chips.
After learning the news, Rubio reportedly warned the tech giant, saying, “Apple is playing with fire.”