US lawmakers warn Apple on using chips from China’s YMTC in new iPhone


Republican lawmakers have warned Apple that it’s going to face intense scrutiny from Congress if the California firm procures reminiscence chips from a controversial Chinese language semiconductor producer for the brand new iPhone 14.

Marco Rubio, Republican vice-chair of the Senate intelligence committee, and Michael McCaul, the highest Republican on the Home overseas affairs committee, stated they have been alarmed following a media report that Apple would add Yangtze Reminiscence Applied sciences Co to its record of suppliers for Nand flash reminiscence chips which can be used to retailer knowledge on smartphones.

“Apple is enjoying with fireplace,” Rubio instructed the Monetary Occasions. “It is aware of the safety dangers posed by YMTC. If it strikes ahead, it will likely be topic to scrutiny prefer it has by no means seen from the federal authorities. We can not permit Chinese language corporations beholden to the Communist get together into our telecommunications networks and tens of millions of Individuals’ iPhones.”

Requested in regards to the congressional considerations, Apple instructed the FT it didn’t use YMTC chips in any merchandise however stated it was “evaluating sourcing from YMTC for Nand chips for use in some iPhones bought in China”.

Apple stated it was not contemplating utilizing YMTC chips in telephones on the market outdoors China. It added that every one consumer knowledge saved on Nand chips utilized by the corporate have been “totally encrypted”.

The FT reported in April that the White Home and commerce division have been investigating claims that YMTC was violating US export management guidelines by supplying chips to Huawei, the Chinese language telecoms gear group.

“YMTC has intensive ties to the Chinese language Communist get together and navy. There’s credible proof that YMTC is breaking export management legal guidelines by promoting items to Huawei,” McCaul instructed the FT. “Apple will successfully be transferring information and knowhow to YMTC that can supercharge its capabilities and assist the CCP obtain its nationwide targets.”

Chuck Schumer, the Democratic Senate majority chief, has additionally privately raised considerations with commerce secretary Gina Raimondo about YMTC, in accordance with an individual aware of the scenario.

YMTC didn’t instantly reply to a request for remark about its relationship with Apple.

In July, a bipartisan group of senators — together with Schumer and Mark Warner, the Democratic chair of the Senate intelligence committee — urged the Biden administration to place YMTC on a commerce division blacklist that will successfully bar US corporations from offering expertise to the Chinese language group.

The senators, who included James Risch, the highest Republican on the overseas relations committee, stated YMTC needs to be placed on the “entity record” because it was violating export management guidelines by promoting reminiscence chips to Huawei.

The lawmakers additionally accused Beijing of subsidising YMTC in ways in which would assist put the “nationwide champion” on observe to dominate the sector by promoting chips under price, as China has finished in different areas such because the photo voltaic trade.

“YMTC is a direct menace,” they wrote to Raimondo.

One particular person aware of the commerce division’s stance stated it was conscious of the considerations and was getting ready a response to the senators.

A spokesperson stated the division’s Bureau of Business and Safety was conducting a evaluate of China-related insurance policies that will “probably search to make use of quite a lot of authorized, regulatory, and, when related, enforcement instruments to maintain superior applied sciences out of the fallacious arms”.

McCaul, who is ready to develop into head of the Home overseas affairs committee if the Republicans win management of the decrease chamber of Congress in November’s midterm elections, stated the Chinese language subsidies to YMTC posed a menace.

“Large CCP subsidies to YMTC imply the corporate will undercut the market. This might very possible devastate the reminiscence chip market and provides China much more management of this important nationwide safety expertise,” he stated. “How can the world’s knowledge be safe if it’s saved on a chip made by a CCP nationwide champion?”

A number of folks aware of the scenario stated lawmakers had requested Apple in current months about YMTC-related hypothesis however acquired no response. Apple didn’t touch upon the congressional inquiries.

The criticism of Apple comes because the Biden administration steps up efforts to make it tougher for China to safe cutting-edge expertise. US officials recently told Nvidia and Superior Micro Units — two US chipmakers — that they must get hold of particular licenses to promote superior processors used for synthetic intelligence purposes to Chinese language corporations.

Congress passed legislation in July that would supply US semiconductor producers with a pool of $52bn to assist improvement of the home chip trade and scale back reliance on overseas corporations.

Underscoring the significance of YMTC for China, President Xi Jinping visited the corporate in 2018 after Washington slapped robust restrictions on Huawei and ZTE, one other Chinese language telecoms gear maker.

“It’s fairly stunning that Apple is partnering with a Chinese language expertise firm . . . which is in precisely the identical trade as the opposite banned corporations and has the direct assist of the highest CCP management,” stated Zach Edwards, an unbiased tech skilled.

Extra reporting by Eleanor Olcott in Hong Kong

Comply with Demetri Sevastopulo, Patrick McGee and Eleanor Olcott on Twitter

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