Apple contemplating potential use of Chinese-produced flash memory
In the competitive world of technology, Apple is reportedly seeking to diversify its supply chain by considering a partnership with Yangtze Memory Technologies, a Chinese semiconductor company.
According to Jeff Pu, an analyst with Haitong International Securities, Apple may be turning to Yangtze due to its competitive pricing. This potential move comes as the Biden administration is attempting to bring semiconductor manufacturing to U.S. soil as a means to compete against China.
The ongoing supply shortage for chips has been a challenge for the automotive and electronics industry for several years. This shortage may have prompted Apple to seek additional suppliers, including Yangtze, following a contamination incident at key NAND production facilities earlier this year.
The contaminated materials used in flash-memory chips are estimated to have ruined at least 6.5 exabytes of storage, potentially affecting Apple's supply. However, it's worth noting that Yangtze's memory is at least a generation behind compared to Apple's current suppliers.
Discussions between Apple and Yangtze have been ongoing for several months. The top manager involved in negotiations is Wei Shaojun, the company's CEO, and Yangtze is backed by chipmaking giant Tsinghua Unigroup.
If a deal is finalised, Yangtze's memory could potentially be used in entry-level devices like the iPhone SE or as a backup to Samsung, Toshiba, and Korean supplier Hynix. It is estimated that Yangtze memory will supply about 5% of memory for the iPhone SE and 3% to 5% of memory for the upcoming iPhone 14.
It's important to note that Apple already works with Samsung and SK Hynix Inc., but is looking to diversify its supply chain. Despite America's attempts to slow down China's technological progress, these efforts have had little impact on Apple so far.
The White House has considered doubling down on rules that restrict the sale of equipment to China's largest chipmaker, Semiconductor Manufacturing International Corp. Intel, Samsung, and TSMC have plans to build massive factories in the United States to compete against China and alleviate supply chain shortages.
As the technology landscape continues to evolve, it will be interesting to see if Apple's potential partnership with Yangtze Memory Technologies becomes a reality and how it may impact the industry.
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