Apple could rely on China for iPhone memory chips

In a company video from September 2021, Apple CEO Tim Cook is announcing the iPhone 13.

Apple is exploring A new source of memory chips entering iPhones, potentially including the first Chinese supplier, after a major Japanese partner’s production shutdowns exposed risks to global supplies.

Kioxia Holdings is already considering expanding its supplier list to include Micron Technology and Samsung Electronics after losing production in February due to pollution, a source familiar with the matter said. While Samsung and SK Hynix, the world’s largest flash memory manufacturers, are likely to make up for this slump, Apple is still keen to diversify its network and offset the risk of further disruptions from the pandemic and shipping disruptions, they said.

People said the iPhone maker is currently testing a sample NAND flash memory chip made by Yangtze Memory Technologies in Hubei. Apple has been discussing a partnership with Yangtze, which is owned by Beijing-backed chip-making champion Tsinghua Unigroup, for months, but no final decision has been made.

Yangtze’s contract with a well-connected parent company will mark a milestone in China’s ambitions to build a world-class domestic chip industry that can compete with the US. Memory is usually the gateway for semiconductor companies looking to build national-scale businesses. It requires a huge investment to maintain, but because production capacity outweighs the complex designs required by high-end processors and other logic chips.

Given that US-China relations are at odds over China’s ambiguous stance on the Ukraine war and US efforts to curb a technological uptrend, the Yangtze partnership could draw criticism from Apple. US lawmakers have long criticized the way Beijing defends and subsidizes local industries.

Founded in 2016 through a merger with a state-owned chip factory, Yangtze Memory is a leading Chinese company in the design and development of its own 3D NAND flash memory, widely used to store data in future devices such as smartphones, laptops, servers and electric vehicles. is evaluated as . Because of its high dependence on imports, China sees a critical component as one of the bottlenecks that could put its economy at risk.

one generation later

Testing and discussion are not guarantees that Yangtze chips will ultimately ship. It’s unclear whether the Chinese company will be able to convince Apple of its credibility, people said. Yangtze memory technology is at least a generation behind, they said, and at best could be a backup choice for Apple’s major vendors, such as South Korea’s Hynix and Samsung. Even if Apple certifies parts from Yangtze, reliability must be measured in terms of yield and quality. Another prominent Chinese Apple supplier, Beijing-based BOE Technology Group, took years to reach mass production of iPhone displays.

But since memory chips are mostly commercial, Apple may decide to use Yangtze products in low-end devices like the iPhone SE, people said. Representatives from Yangtze Memory and Apple declined to comment.

Parts shortages and logistics problems triggered by COVID-19 have plagued the world’s largest consumer electronics brands for the past two years, prompting rethinking of supply chains that once relied on just-in-time inventory and global networks. In February, Kioxia halted production at two plants in Japan due to material contamination, highlighting the risk of overreliance on certain suppliers. That could help boost flash memory chip prices by 5-10% in the June quarter, industry tracker Trendforce estimates.

Apple’s iPhone SE

Apple’s iPhones are assembled primarily in China by Foxconn Technology Group and Pegatron. Pegatron imports components such as memory chips from several vendors before assembly into final devices. Yangtze Memory provides an attractive source of cheap chips near the factory, while potentially gaining points with the government in the world’s largest smartphone market.

“Yangtze memory will supply about 5% of the memory for the iPhone SE and 3-5% of the memory for the upcoming iPhone 14,” said Jeff Pu, analyst at Haitong International Securities. Apple offers this product at a competitive price. is using”. Use a theoretical estimate.

Yangtze Memory’s products rely on an in-house developed technology known as Xtacking. The technology integrates memory cell wafers with support circuitry, which in some cases offers higher performance compared to conventional technologies, a source said. While Tsinghua Unigroup, the alma mater of Chinese President Xi Jinping (習近平), is undergoing a government-led restructuring following a series of debt defaults, memory chip makers are operating normally and unaffected by the financial difficulties of their parent company. The official said no. . — (c) 2022 Bloomberg LP

Apple could rely on China for iPhone memory chips

Source link Apple could rely on China for iPhone memory chips

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