Apple would use Chinese supplier for storage chips

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apple could use a chinese chipmaker for the first time for iphone storage chips.jpg
apple could use a chinese chipmaker for the first time for iphone storage chips.jpg

A disruption in Apple’s supply chain for iPhone storage chips could prompt the Cupertino company to buy flash memory directly from a Chinese supplier for the first time.

It’s not really an ideal situation. At best, given that Apple intends to reduce rather than increase its reliance on China, it’s not the best option. However, it can be especially controversial this situation with the current context of the company and certain political tension worldwide.

Chinese chip supplier for the first time with Apple

Apple currently buys a large proportion of its iPhone storage chips from a joint venture of two Japanese companies: Western Digital and Kioxia. However, two of its plants were affected last month by a contamination problem, for which they have not specified the reason. This fact meant that production had to be reduced considerably.

Although, this has caused the belief that Apple has been able to compensate for this situation with an increase in orders to Samsung and SK Hynix. The incident has revealed Apple’s dependency on this partnership and has probably led the company to explore other options in order to diversify its suppliers.

Bloomberg, for his part, reports that Apple is considering this interesting option. Such action would be the first time to add a Chinese flash storage manufacturer to its list of suppliers:

The iPhone maker is testing samples of NAND flash memory chips. These have been manufactured by the Hubei-based company Yangtze Memory Technologies Co. they said [las fuentes], who asked not to be identified to discuss private deliberations. Apple has been discussing joining up with Yangtze, owned by Beijing-backed chipmaker champion Tsinghua Unigroup Co., for months now, though no final decision has been made.

The website also highlights the controversy that would likely ensue if Apple went ahead:

Pairing up with Yagtze could expose Apple to criticism at home, as ties between Washington and Beijing are straining over China’s ambiguous stance on the Ukraine war, as well as US efforts to contain its technological rise. US lawmakers have long criticized the way Beijing defends and subsidizes local industry.

However, things are still at an early stage. Bloomberg points out that Yangtze is a generation behind current Apple suppliers in terms of the technology they have used. Which can take years for critical new suppliers to convince the iPhone maker that they can meet quality and production volume requirements. This was the case, for example, when BOE jumped on board to add to Apple’s supply chain for iPhone OLED panels. Talks started around 2017 and the company received its first orders until 2020.

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