Apple’s plans to bring Chinese memory chip outfit YMTC on board have been paused, according to a new report. The chips were originally expected to be used in future iPhones that would be sold in the Chinese market.
The report notes that new U.S. export controls imposed on Chinese tech companies means that Apple has now decided to take another look at the deal, despite the company having spent months getting the deal off the ground.
The chips are down
The report coming out of Nikkei Asia has Apple putting plans on hold after the new controls mean it would not be able to work with Yangtze Memory Technologies (YMTC) without a license. Apple reportedly spent months getting the memory certified, but YMTC has now been added to a list of Chinese companies that are “unverified,” meaning officials have not been able to inspect them.
The list includes outfits that companies like Apple are no longer able to share specific information with. The report says that this is a sign that “Washington’s crackdown is creating a chilling effect down the supply chain, with Apple now left in a difficult position.
This news comes just days after analyst Ming-Chi Kuo outlines Apple’s plans to change its supply chain in ways that would reduce its reliance on China. Apple’s long-term goal is reportedly to have devices sold within China be built there, whereas everything else will be built internationally. Notably, the memory chips Apple intended on buying from YMTC were only destined for iPhones sold in China.
Apple has been struggling with ongoing manufacturing issues since the onset of the COVID-19 pandemic, thanks in part to ongoing lockdowns in the country — something that has hastened the need for international supply chain cover.