Late last month a report surfaced that Apple is in talks with China’s “national champion” semiconductor maker, Yangtze Memory Technologies Co. (YMTC), to provide chips for its next iPhone.
This week, China Tech Threat (CTT) is launching a new site to track Apple’s negotiations with YMTC, what’s at stake for the U.S. from national security and economic standpoints, and how policymakers and experts are reacting.
“Apple is the most valuable brand in the world, and the choices it makes send important signals,” Dr. Roslyn Layton explained. “Apple’s partnership with YMTC would put the Chinese military in the iPhone, one of the most popular devices in the world. This deal 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 dominate the global chip market.”
Experts have cautioned that YMTC, which has known ties to the Chinese military, is part of the People’s Republic of China’s (PRC) ambitions to dominate the semiconductor market and poses a threat to U.S. national security.
“Outrageous that Apple may use YMTC chips in the iPhone,” U.S. Senator Bill Hagerty tweeted recently. “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.”
Senator Hagerty and U.S. Representative Michael McCaul last year called on U.S. Commerce Secretary Gina Raimondo to add YMTC to the Entity List, citing “specific facts that link YMTC to the CCP military, the Party-state and a national semiconductor plan designed to deplete the U.S. defense industrial base.”
The White House’s supply chain review report last year also found that YMTC has received an estimated $24 billion in state subsidies and presents a “potential low-cost threat to U.S.-based memory companies.”
In a letter to Apple CEO Tim Cook this month, U.S. Senator Marco Rubio expressed “serious concern” about the company’s potential partnership with YMTC: “YMTC is a rapidly expanding, state-owned company with extensive links to the Chinese Communist Party’s (CCP) armed wing, the People’s Liberation Army (PLA). It is unacceptable that sales of the next generation of iPhones would end up strengthening the Chinese military and put the lives of American service-members at risk as a result.”
“Why have a subsidized effort to on-shore chip production if major U.S. companies are going to teach enemies how to upgrade their chip capabilities and buy off-shore,” Dan DiMicco, Vice Chairman of the Coalition for a Prosperous America, tweeted. “The madness must stop, or the game is over.”
“Mr. Estevez needs to hit the ground running,” Dr. Layton said, referring to Congress’ confirmation of Alan Estevez to lead the Department of Commerce’s Bureau of Industry and Security (BIS). “With recent news that Apple is sourcing chips from YMTC for the iPhone, BIS must stop dragging its feet on calls to add the Chinese military fab to the Entity List.”
Join us following these important developments, which will have resounding implications for the United States’ national security and economic interests.