Apple Inc is exploring new sources of the memory chips that go into iPhones, including its first Chinese producer of the critical component, after a disruption at a key Japanese partner exposed the risks to its global supply.
It is considering expanding a roster of suppliers that already includes Micron Technology Inc and Samsung Electronics Co after Kioxia Holdings Corp in February lost a batch of output to contamination, people familiar with the matter said.
While Samsung and SK Hynix Inc — the world’s largest makers of flash memory — are likely to pick up the slack, Apple remains keen to diversify its network and offset the risk of further disruption from the COVID-19 pandemic and shipping snarls, they said.
Photo: Reuters
The iPhone maker is testing sample NAND flash memory chips made by Hubei-based Yangtze Memory Technologies Co (長江存儲), the people said, asking not to be identified discussing private deliberations.
Apple has been discussing the tie-up with Yangtze, owned by Beijing-backed chipmaking champion Tsinghua Unigroup Co (清華紫光), for months, but no final decisions have been made.
A contract for Yangtze and its well-connected parent would be a milestone for China’s ambitions to build a world-class domestic chip industry that can compete with the US.
For semiconductor players aspiring to build a business on a national scale, memory is typically a gateway, because production capabilities count more than the intricate designs needed for advanced processors and other logic chips — though it requires enormous investment to sustain.
Tying up with Yangtze could open Apple to criticism back home given ties between Washington and Beijing are fraying over China’s ambiguous stance on the Ukraine war, as well as US efforts to contain its technological ascent. US lawmakers have long railed against the way Beijing champions and subsidizes local industry.
Created through a merger with a government-run chip factory in 2016, Yangtze Memory is regarded as China’s best shot at designing and developing homegrown 3D NAND flash memory, widely used for storing data in smartphones, laptops, servers and future gadgets, such as electric vehicles. Beijing regards the crucial component as one of the bottlenecks that could endanger its economy, because of a heavy reliance on imports.
The testing and discussions are no guarantee Yangtze chips will ultimately ship. It is unclear if the Chinese firm can convince Apple of its dependability, the people said.
Yangtze Memory technology is at least one generation behind and could at best be a backup choice to Apple’s main suppliers like Hynix and Samsung, they said. Even if Apple qualifies Yangtze’s components, it will need to gauge its reliability in terms of yields and quality. It took years for Beijing-based BOE Technology Group Co, another prominent Chinese Apple supplier, to reach high-volume production of iPhone displays.
Yet because memory chips are largely commoditized, Apple could conceivably decide to use Yangtze’s product in lower-end devices, such as the iPhone SE, the people said.
Apple’s iPhones are put together primarily in China by Foxconn Technology Group (富士康科技集團) and Pegatron Corp (和碩), which take components like memory chips from scores of different providers before assembling them into the final device. Yangtze Memory could offer an attractive source of cheaper chips close to their plants.
“Yangtze memory will supply about 5 percent of memory for iPhone SE, and 3 percent to 5 percent of memory for the upcoming iPhone 14. Apple is using its product because it offers competitive pricing,” said Jeff Pu (蒲得宇), an analyst with Haitong International Securities (海通國際證券), working off theoretical estimates.
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
RSS