China's Army to Infiltrate iPhones with YMTC Chips

NEW REPORT: Silicon Sellout: How Apple’s Partnership with Chinese Military Chipmaker YMTC Threatens National Security

This report details five risks of the Apple-YMTC partnership, including the technological risks to national security, lost privacy to the Chinese government, lost US technology leadership, supply chain bottlenecks and lost jobs. It further details how the partnership between the world’s most profitable company and China’s national champion for memory chips will precipitate a collapse of profit margins and drive at least one make of memory chips from the free world out of business.

Barring that Apple walks away voluntarily from the ill-advised partnership, the report describes eight policy options to mitigate the threat, importantly to restrict technology exports to and imports from YMTC. Download the full report by China Tech Threat and the Coalition for a Prosperous America.

What’s at Stake?

Apple is the most valuable brand in the world, and the choices it makes send important signals. It was recently reported that Apple may use chips from Yangtze Memory Technologies Company (YMTC) in the next iPhone. This is cause for alarm as experts and policymakers have called out YMTC, a state-owned chip maker with close ties to the People’s Liberation Army (PLA), and called for it to be added to the Entity List. Apple moving forward with this controversial company would threaten Americans’ privacy and security, undermine semiconductor jobs in democratic countries, give YMTC undeserved credibility on the world stage, and help China advance its goal to upset and ultimately dominate the global chip market.

OUR POV

CTT Blog: 8 Solutions for Mitigating the Threat of an Apple-YMTC Deal

CTT Blog: Apple Reportedly Considering Sourcing Chips for Next iPhone from China’s “National Champion”

CTT Blog: CTT Quick Cut: BIS Is at an “Inflection Point,” Should “Rebalance Economics and Security”

CTT Blog: Chinese Government Subsidies in the Semiconductor Industry: Bad for American Companies and Competitiveness

CTT Blog: YMTC Threat Continues to Grow; American Companies May Be Breaking U.S. Law

CTT Blog: Is BIS Edging Closer to Putting YMTC on the Entity List?

CTT Blog: “They Are Going to Be on the Bad Boy List” – BIS Under Secretary Alan Estevez Hints at Tough Export Control Actions

CTT Blog: “Silicon Sellout” Report Set to Highlight Dangers of Apple-YMTC Deal

Forbes: The Security, Privacy, And Supply Chain Problems Of The Chinese Military In Your iPhone

Forbes: China Aims To Dominate Flash Memory

Forbes: Commerce Allows Sales To Memory Chip Maker YMTC Despite Ties To Chinese Military

EXPERT OPINIONS

U.S. Senator Marco Rubio‘s wrote to Apple CEO Tim Cook, “America’s premier tech companies should recognize the tremendous risks – both to American national security and to their own ledgers, should any presidential administration update its export control listings in the near future – incurred by doing business with YMTC for its memory chips or any other products.”

U.S. Senator Bill Hagerty tweeted, “Outrageous that Apple may use YMTC chips in the iPhone. YMTC is China’s state-owned champion for memory chips & part of the CCP’s plan to control strategic dual-use supply chains. Last July, @RepMcCaul & I urged @SecRaimondo to add YMTC to the Entity List.”

Joint Venture Silicon Valley’s David Witkowski commented, “My technology has been Apple-free for 25 years and will remain so. AMAT, LAM, etc. should stop selling to YMTC, SMIC, others. The US should place leading-edge fabrication technology under ITAR controls.”

Dan DiMicco, Vice Chairman of the Coalition for a Prosperous America’s Board tweeted, “Why have a subsidized effort to on-shore chip production if major US companies are going to teach enemies how to upgrade their chip capabilities and buy off-shore. The madness must stop or the game is over.”

CTT Conversations: SemiAnalysis’ Dylan Patel, “Understanding the NAND Apocalypse“