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US Lawmakers Concerned About Apple's Decision to Use YMTC's 3D NAND

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(Image credit: YMTC)

Adding another 3D NAND maker to its supply chain is certainly something that is good for Apple, but U.S. legislators are not particularly happy that one of the world's largest consumer electronics companies will use memory from YMTC and thereby essentially help China's semiconductor industry to develop. Apple argues that it plans to use chips from Yangtze Memory only for iPhones to be sold in China. 

Apple has been evaluating the use of 3D NAND from YMTC for months now, and last week a report emerged that the company finally decided to use flash memory from the Chinese manufacturer for its iPhones. The company confirmed to Financial Times that it has been considering using YMTC's products for some of its smartphones sold in China, yet it did not confirm that these chips were used as of last week. There were no plans to use YMTC's devices in smartphones sold outside of China, Apple is reported to have said. But the U.S. lawmakers are still concerned about Apple working with Yangtze Memory. 

YMTC is largely controlled by Tsinghua Unigroup, a company directly to the Chinese government via various banks and investment funds. It also has ties with Tsinghua University, funded by the Ministry of Education. As a result, YMTC is to a large degree  a state-controlled company, which is a concern of U.S. legislators. In fact, they accuse the Chinese government of illegally subsidizing YMTC, giving it a competitive edge over American makers of memory, such as Micron. This of course ignores the $76 billion Chips bill.

Another reason why U.S. lawmakers are worried about YMTC is that it allegedly supplied 3D NAND memory and/or products to Huawei without obtaining an export license from the U.S. Department of Commerce. As of 2020, everyone making products for Huawei using technologies developed in the U.S. (hardware tools used in semiconductor fabs, electronic design automation tools used to develop chips, etc.) must obtain a license from the U.S. Department of Commerce.

"YMTC has extensive ties to the Chinese Communist party and military," said Michael McCaul, a congressman for Texas who sits in the House foreign affairs committee, in an interview with Financial Times. "There is credible evidence that YMTC is breaking export control laws by selling goods to Huawei. Apple will effectively be transferring knowledge and know-how to YMTC that will supercharge its capabilities and help the CCP achieve its national goals." 

Some lawmakers want commerce secretary Gina Raimondo to put YMTC on the entity list for its ties with CCP, and therefore ban it from getting U.S. tools and software, according to the Financial Times's sources.

While YMTC is a very competitive company that indeed has close ties with the Chinese government, it is only one of Apple's suppliers from China. There are tens of companies from China that supply parts for Apple's iPhones and other products. Actually, even some OLED screens for Apple's smartphones are supplied by Beijing-based BOE Technology Group. That said, even without YMTC, Apple's products are full of technology developed and made in China. That might change eventually as Apple shifts some of its production to India and other countries, but that will of course be a slow process. 

Anton Shilov
Freelance News Writer

Anton Shilov is a Freelance News Writer at Tom’s Hardware US. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.

  • gg83
    I really like Antons writing style and his ability to stay neutral and not insert their own opinions. It is hypocritical to complain about China subsidies when we are doing similar with the chips act.
    Reply
  • The Historical Fidelity
    gg83 said:
    I really like Antons writing style and his ability to stay neutral and not insert their own opinions. It is hypocritical to complain about China subsidies when we are doing similar with the chips act.
    I half agree with your assessment however, their is a big difference between a National incentive program to convince private companies to build manufacturing facilities in country and being a state owned business subsidized and controlled heavily by the CCP which shares all of its technology, including foreign technology needed to manufacture for international companies, with the People’s Liberation Army to help create offensive weapons and capabilities.
    Reply
  • WINTERLORD
    My concern with Apple using stuff backed by the chinease military is leaks of confadential information around the globe for Apple users
    Reply
  • gg83
    The Historical Fidelity said:
    I half agree with your assessment however, their is a big difference between a National incentive program to convince private companies to build manufacturing facilities in country and being a state owned business subsidized and controlled heavily by the CCP which shares all of its technology, including foreign technology needed to manufacture for international companies, with the People’s Liberation Army to help create offensive weapons and capabilities.
    Definitely true. I feel like most of our tech starts as military tech then goes to market.
    Reply
  • NatalieEGH
    Please forgive me. According to what I have read the government of the USA (I am a citizen), fears phones and devices made by Huawei may have Chinese government spyware? The Huawei company, already has strong ties to the People's Liberation Army (the founder was a deputy regimental head) and has been accused of putting Chinese spyware on phones sold outside of China.

    Yangtze Memory Technologies Corp (YMTC) is PROVIDING chips and hardware to Huawei. "Another reason why U.S. lawmakers are worried about YMTC is that it allegedly supplied 3D NAND memory and/or products to Huawei without obtaining an export license from the U.S. Department of Commerce. As of 2020, everyone making products for Huawei using technologies developed in the U.S. (hardware tools used in semiconductor fabs, electronic design automation tools used to develop chips, etc.) must obtain a license from the U.S. Department of Commerce. " While it may be a violation of a law in the USA, I rather doubt it is a violation of Chinese law. If the Chinese do not choose to recognize the laws of the USA, there are several actions: 1) Go to war, never a good choice; 2) Embargo, considering we get a large percentage of our chips and boards from China at least until the $72 billion multiplies chip and board production by at least 3-4 times current level, that would be more damaging to the USA; and 3) rattle sabers then sit down and be quiet

    The article states, ""There is credible evidence that YMTC is breaking export control laws by selling goods to Huawei. Apple will effectively be transferring knowledge and know-how to YMTC that will supercharge its capabilities and help the CCP achieve its national goals."" Please tell me how Apple is transferring knowledge other than possibly providing chip and port pin-out information. I can easily determine that information with any multimeter and oscilloscope.

    I truly doubt there will be any technology transfer to the China through a company SELLING parts.

    As to the spyware, well I rather suspect that is there already. Carrying around a cell phone is carrying around a tracking device. Unless the device is properly isolated, the battery removed, and any capacitors discharged, the phones provided by T-Mobile, Verizon, AT&T, Apple, ... can all be used for domestic spying on the customers. If the government of the USA is so scared of a technology transfer to our international enemies, perhaps they should have special phones made by the government and issued to government employees and to contractor, and subcontractor personnel.
    Reply
  • escksu
    Why don't congress pay apple 1 trillion and ask them to move manufacturing back to USA?? If trump and Biden could print trillions of dollars, what's another trillion?? Can also extend it to other companies too..
    Reply
  • systemBuilder_49
    This is old fashioned Russian communist behavior! Force the Western company to use local parts and pretty soon force them to build local factories in their country and pretty soon force Apple to be paid in iphones from apples own factory! Because the communist country is incapable of building things themselves!

    Shame on you apple!
    Reply
  • rluker5
    gg83 said:
    I really like Antons writing style and his ability to stay neutral and not insert their own opinions.
    I do as well. It is a valuable talent when few can show restraint.
    Just look at this comment section. I'm not saying expressing political opinions is bad, part of being human. But whichever side you are on with whatever comes up, Anton is coming out of this smelling like a rose.
    Reply
  • escksu
    WINTERLORD said:
    My concern with Apple using stuff backed by the chinease military is leaks of confadential information around the globe for Apple users

    Almost true.... Except that a memory chip alone is usually not capable of doing that.
    Reply
  • The Historical Fidelity
    escksu said:
    Almost true.... Except that a memory chip alone is usually not capable of doing that.
    The problem is the insertion of ghost circuits into chip designs that perform specific functions in the background undetectable by the OS, such as transferring data back to the source of the ghost circuit. Several US companies have found these circuit additions in their products after being produced by Chinese semiconductor manufacturers and have resulted in intellectual property theft tracked back to servers in China. I will see if I can find the Asianometry YT video that discusses this.
    Reply