US senators press Apple over possible Chinese chipmaker deal

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US senators press Apple over possible Chinese chipmaker deal

22 September 2022 Technology & Digitalization 0

US senators have asked the intelligence community to examine the threat a potential deal between Apple and the Chinese chipmaker Yangtze Memory Technologies Co poses to national security, in an escalation of the political pressure being applied to the iPhone maker over the arrangement.

Mark Warner, the Democratic chair of the Senate intelligence committee, and the Republican vice-chair Marco Rubio wrote to director of national intelligence Avril Haines requesting a review just days after the Financial Times reported that Apple was considering buying memory chips from YMTC for the new iPhone 14.

“We write to convey our extreme concern about the possibility that Apple Inc will soon procure 3D Nand memory chips from Yangtze Memory Technologies Co,” the senators said. “Such a decision would introduce significant privacy and security vulnerabilities to the global digital supply chain that Apple helps shape given YMTC’s extensive, but often opaque, ties to the Chinese Communist party.”

The FT has reported that YMTC has supplied memory chips to Huawei, the controversial Chinese telecoms equipment giant, for at least two phones, including its flagship foldable Mate Xs 2. This would be a possible violation of a US export control that effectively bars companies from providing products containing American technology to Huawei.

Government and industry experts assume that all Chinese chipmakers use US technology because American chip design software and manufacturing tools are ubiquitous in all semiconductor supply chains.

Apple recently told the FT that it was “evaluating” sourcing from YMTC for some iPhones in China. Apple on Thursday declined to comment on the letter to Haines, which was also signed by Democratic Senate majority leader Chuck Schumer and John Cornyn, a Texas Republican.

The senators asked Haines to review the risks that an Apple-YMTC deal would pose to economic and national security. They asked her to look into how the Chinese Communist party uses YMTC to bolster its domestic chip industry and displace semiconductor manufacturers from the US and allied countries. They also requested an examination of the role YMTC allegedly plays in helping Chinese companies, including Huawei, evade US sanctions.

YMTC is just one of many Chinese technology groups to have come under increasing scrutiny in Washington. National security adviser Jake Sullivan last week said the US had to re-evaluate its longstanding premise that it had to maintain a “relative” advantage over competitors, including in chips, where it “previously maintained a ‘sliding scale’ approach that said we need to stay only a couple of generations ahead”.

“That is not the strategic environment we are in today,” Sullivan told SCSP, a think-tank focused on enhancing US technology in critical fields. “Given the foundational nature of certain technologies, such as advanced logic and memory chips, we must maintain as large of a lead as possible.”

The US commerce department is working on a range of measures that would make it harder to export certain chip-related technology to China in an effort to slow down its efforts to build up its domestic industry.

Additional reporting by Patrick McGee. Follow Demetri Sevastopulo on Twitter