Apple and its supply chain are said to have reached a brief snag, with the company attempting to overcome it by acquiring iPhone memory chips from Samsung. With a trade restriction in place, Apple is forbidden from doing business with Chinese suppliers, and the technological behemoth will have to rely on other manufacturers.
Apple had planned to purchase 128-bit 3D NAND flash memory from Chinese supplier Yangtze Memory Technologies (YMTC) and utilise it in iPhones sold in China. The relocation was scheduled to take place this year, but the US administration intervened. If the transaction had been approved, Apple would have reportedly sourced approximately 40% of all iPhone memory chips from YMTC.
According to DigiTimes, the California-based company must now rely on Samsung, one of the biggest storage memory producers in the world, to satisfy almost 40% of iPhone chip orders. Samsung already provides Apple with millions of iPhone 14 Pro and iPhone 14 Pro Max displays, so by placing additional orders with the Korean giant, Apple will be forced to rely more on its main smartphone rival.
It was previously stated that YMTC could no longer provide Apple with iPhone memory chips due to tougher export regulations.
The U.S. Commerce Department is already looking into YMTC because it violates the law by selling to Huawei, a phone manufacturer that has previously been subject to one of the harshest trade restrictions ever imposed on a tech company.
Given Samsung’s vast resources and the scale on which Apple works, the two parties may come to an agreement whereby Samsung raises output while charging its partner less because of the possible volume of chip shipments it will supply Apple.
Currently, the supply chain for Apple’s iPhone memory chips includes two Japanese companies, Western Digital and Kioxia, with a Korean company, SK Hynix, handling the remaining orders. We will learn in the future just how much Samsung can provide Apple in the upcoming months.