Apple Delays To Use Chips From YMTC Following The Prohibition Of Export Chips From The US Government

Apple Inc has postponed plans to use memory chips from Yangtze Memory Technologies Co (YMTC) (photo: dock. Pixabay)

JAKARTA - US tech giant Apple Inc has postponed plans to use memory chips from China's Yangtze Memory Technologies Co (YMTC) in its products. According to a Nikkei report on Monday, October 17, this comes after Washington imposed tighter export controls on Chinese technology companies.

According to a Nikkei report, Apple originally planned to start using the state-funded YMTC NAND flash memory chip earlier this year. The chip was originally planned to only be used for iPhones sold in the Chinese market.

The company is finally considering buying up to 40% of the chips needed for all iPhones from YMTC.

Analysts believe that YMTC is one of the small companies that provides memory chips for Apple and will see little or no effect of the move.

However, CFRA Research analyst Angelo Zino said that the greater implication was limiting Apple from a possible further diversification of its supplier base by utilizing domestic Chinese players and increasing its cost profile over time.

Apple moved larger production quantities to Vietnam and India to make products like Airpods and new iPhones and start leaving China's production.

The iPhone maker's shares immediately rose 1.6% to $140.59 in pre-bell trading amid a broader market rise.

The United States last week added China's leading memory chip maker YMTC and 30 other Chinese entities to the list of non-checkable or verified companies by US officials. This increases tensions with Beijing, which begins 60-day working hours that could trigger harsher penalties.

A series of export controls of Joe Biden's government in China is an attempt to slow Beijing's technological and military advances by cutting the country's supply of certain semiconductor chips made anywhere in the world with US equipment.

Apple did not immediately respond to a request for comment from Reuters, while YMTC also declined to comment.