If Apple’s supply chain for iPhone storage chips is disrupted, the Cupertino company may have to purchase flash memory from a Chinese supplier for the first time.
Given Apple’s desire to reduce rather than increase its reliance on China, this is not an ideal situation at any time. The current political climate, on the other hand, makes it all the more contentious.
Today, a joint venture between Western Digital and Kioxia in Japan provides a significant portion of Apple’s iPhone storage chip needs. Due to an unidentified contamination issue, production has been significantly reduced at two of their plants in the last month. Despite the fact that Apple is believed to have been able to compensate with increased orders to Samsung and SK Hynix, the incident highlighted Apple’s dependence on the partnership and likely prompted the company to explore alternatives to diversifying its suppliers.
According to Bloomberg, Apple is contemplating adding a Chinese flash storage manufacturer to its supplier list for the first time.
According to sources who requested anonymity when discussing private deliberations, Yangtze Memory Technologies Co., based in Hubei, China, has supplied the iPhone maker with sample NAND flash memory chips for testing. The Yangtze, owned by Beijing-backed chipmaker Tsinghua Unigroup Co., has been talked about for months, but no final decisions have been made.
Sites like this one point out the potential controversy that would arise if Apple went ahead with the plan.
It is possible that Apple’s tie-up with Yangtze could lead to backlash at home because of China’s ambiguous stance on the Ukraine conflict and American efforts to restrain its technological advancement. Congressmen in the United States have long complained about Beijing’s support for and subsidisation of domestic industry.
While things are at an early stage, they’re progressing well enough. Bloomberg reports that Yangtze is a generation behind Apple’s current suppliers in terms of technology, and it can take critical new suppliers years to convince the iPhone maker that they can meet both quality and volume production requirements. As an example of this, BOE sought to be included in Apple’s OLED iPhone panel supply chain when it approached the company. There were first talks about the project in 2017, and the company received its first orders in 2019.