Apple and its supply chain have reportedly hit a temporary roadblock, with the company attempting to scale this obstacle by sourcing iPhone memory chips from Samsung. With a U.S. trade ban in effect, Apple is barred from conducting business with Chinese suppliers, and the technology giant will need to start relying on other manufacturers.
Samsung Will Have to Cover up to 40 Percent of iPhone Memory Chip Shipments for Apple in the Future
Apple originally intended to source 128-bit 3D NAND flash memory from Chinese supplier Yangtze Memory Technologies (YMTC) and use this component in iPhones sold in China. The move would have happened as early as this year, but then, the U.S. government intervened. Assuming the deal would have received the green light, Apple would have reportedly sourced around 40 percent of all iPhone memory chips from YMTC.
Instead, the California-based firm now has to rely on Samsung, one of the largest storage memory manufacturers in the world, to fulfill around 40 percent of iPhone chip orders, according to DigiTimes. Samsung already supplies Apple with iPhone 14 Pro and iPhone 14 Pro Max displays in the millions, and giving more orders to the Korean giant means Apple will have to depend more on its biggest rival in the smartphone space.
Earlier, we reported that due to tighter export controls, YMTC can no longer supply Apple with iPhone memory chips. YMTC is already being investigated by the U.S. Commerce Department as it broke the law, violating export controls by selling to Huawei, a phone maker that has already experienced one of the worst trading sanctions for a tech firm.
Samsung possesses immense resources, and given the scale Apple operates on, both could arrive at a mutual understanding where Samsung increases output while charging its partner less due to the sheer chip shipments it will potentially provide Apple.
Two Japanese firms, Western Digital and Kioxia, are currently a part of Apple’s iPhone memory chip supply chain, with a Korean firm, SK Hynix, covering the remaining orders. It is unclear how much Samsung can provide Apple in the coming months, but we will find out in the future.
News Source: DigiTimes