March 2022 Newsletter

YMTC Chips May Be In The Next iPhone.

Light Reading’s Iain Morris broke news based on a recent Credit Suisse report that Apple, the world’s most valuable company, is in talks to use YMTC chips in the iPhone 14. YMTC is a known Chinese military fab. As Morris aptly put it, “YMTC’s presence in the best-selling smartphone would look about as welcome as a Gazprom pipeline through Germany does to opponents of Russia.” China Tech Threat has written extensively about YMTC’s close ties to the PRC and PLA, noting that it should be designated on the  Commerce Department’s Bureau of Industry and Security (BIS) Military End User list, if not the Entity List itself. CTT observed: “The revelation that Apple is in talks with China’s ‘national champion’ semiconductor manufacturer should raise red flags for the Biden Administration… Apple’s partnership with YMTC could put millions of Americans’ personal information at risk and create serious vulnerabilities in U.S. defenses. Policymakers must act—and they have a very narrow window to do so.” 

US Missing Key Player In Russia Sanction Enforcement: #VoteEstevezNow.

While a series of BIS actions will deliver a powerful punch to Russia, they also expose a weakness: BIS, the enforcer of export controls as tools for our national security strategy, has no leader at the top at this critical time. China Tech Threat (CTT) calls on the US Senate to give BIS Undersecretary nominee Alan Estevez an up or down vote now. Kevin Wolf, a top export control attorney who was once rumored for the post, told CTT: “BIS is advancing significant national security objectives in novel and complex ways. It needs Alan Estevez as its Under Secretary now. Seriously. Whatever issues are holding up his confirmation need to be set aside.” Dr. Roslyn Layton wrote about this for ForbesPolitico also reported on the BIS vacancy, noting that a key player is missing. 

Lenovo Sales To Russia Demand U.S. Security.

China’s Lenovo, the world’s leading laptop maker which controls 18.5% of the Russian PC market, has dodged the question of whether they will continue to sell to Russia, as their US competitors Dell, HP, Apple and others have left. Chinese tech vendors continue to operate in Russia with Huawei reportedly helping the Russian government to defend itself against Ukrainian hackers. “Xi Jinping’s role in Ukraine is far less visible than Vladimir Putin’s, but make no mistake: China is also a combatant in the war,” Gordon Chang, author of The Great U.S.-China Tech War, wrote in NewsweekCTT Co-founder Dr. Layton warned that should a similar scenario arise if conflict erupts in Taiwan: “Should the US and PRC enter into conflict, it may be too late for the US to end reliance on Chinese technology,” Dr. Layton wrote in Forbes.    

The State-Federal Tech Threat Disconnect Underscored As 6 States Hacked By China.

The AP recently reported that the Chinese government broke into the computer networks of at least six state governments in the United States in the last year alone. During a recent event, CTT emphasized the security gap between federal and state government. Lenovo laptops and Lexmark printers may be restricted for federal use, but that doesn’t stop state governments from purchasing this vulnerable tech. The event featured New York Rep. Claudia Tenney who warned, “We don’t know what is in Lexmark printers or Lenovo computers.” Meanwhile, some states are beginning to take action to mitigate this vulnerability. Georgia, for example, is advancing legislation to prohibit the State of Georgia or any state agencies from contracting with any company owned or operated by the Chinese government.

Semiconductor Industry Analyst Warns Of Impending NAND Apocalypse.

Dr. Roslyn Layton recently talked with Dylan Patel, a leading semiconductor industry analyst, about the evolving nature of the semiconductor industry and threat of a NAND apocalypse. Patel told Dr. Layton, “The NAND apocalypse is the result of Chinese subsidies into semiconductors, totaling roughly $250 billion across 2020 to 2025. They’re ‘Made in China’ plan has them going to a very high percentage of domestically produced chips. And NAND is a critical component within that… YMTC is able to produce NAND memory chips, critical memory that’s used in nearly every device and server and military application. And they will be able to essentially cause margins in the entire industry to fall heavily due to these huge subsidies… like they have in other industries in the past such as solar.” View the full conversation here

Nobel Peace Prize Nominee’s “Trust” Principle Counters China’s Techno-economic Aggression.

Former Under Secretary of State for Economic Affairs Keith Krach was nominated for the Nobel Peace Prize for his work to protect freedom for the Taiwanese and Uyghurs. His nomination reflects a career promoting trusted technology. In a Forbes column describing Krach’s work and his signature Clean Network effort, Dr. Roslyn Layton writes: “considering the integral role of tech in humanity’s next chapter, world peace is unattainable without the widespread adoption of what Mr. Krach calls trusted technology rooted in democratic values.

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