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, mentioned they had 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 information on smartphones.
“Apple is taking part in 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 enable Chinese language corporations beholden to the Communist social gathering into our telecommunications networks and tens of millions of Individuals’ iPhones.”
Requested in regards to the congressional issues, Apple instructed the FT it didn’t use YMTC chips in any merchandise however mentioned it was “evaluating sourcing from YMTC for Nand chips for use in some iPhones offered in China”.
Apple mentioned it was not contemplating utilizing YMTC chips in telephones on the market outdoors China. It added that each one person information saved on Nand chips utilized by the corporate had been “absolutely encrypted”.
The FT reported in April that the White Home and commerce division had been investigating claims that YMTC was violating US export management guidelines by supplying chips to Huawei, the Chinese language telecoms tools group.
“YMTC has in depth ties to the Chinese language Communist social gathering and army. There may be credible proof that YMTC is breaking export management legal guidelines by promoting items to Huawei,” McCaul instructed the FT. “Apple will successfully be transferring data and knowhow to YMTC that may supercharge its capabilities and assist the CCP obtain its nationwide objectives.”
Chuck Schumer, the Democratic Senate majority chief, has additionally privately raised issues with commerce secretary Gina Raimondo about YMTC, based on an individual acquainted with the state of affairs.
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 may 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, mentioned YMTC must 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 monitor to dominate the sector by promoting chips under value, as China has achieved in different areas such because the photo voltaic business.
“YMTC is a right away risk,” they wrote to Raimondo.
One particular person acquainted with the commerce division’s stance mentioned it was conscious of the issues and was making ready a response to the senators.
A spokesperson mentioned the division’s Bureau of Trade and Safety was conducting a evaluate of China-related insurance policies that may “doubtlessly search to make use of a wide range of authorized, regulatory, and, when related, enforcement instruments to maintain superior applied sciences out of the incorrect palms”.
McCaul, who is about to change into head of the Home overseas affairs committee if the Republicans win management of the decrease chamber of Congress in November’s midterm elections, mentioned the Chinese language subsidies to YMTC posed a risk.
“Huge 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 mentioned. “How can the world’s information be safe if it’s saved on a chip made by a CCP nationwide champion?”
A number of folks acquainted with the state of affairs mentioned lawmakers had requested Apple in latest months about YMTC-related hypothesis however obtained 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 more durable for China to safe cutting-edge expertise. US officers lately instructed Nvidia and Superior Micro Gadgets — two US chipmakers — that they must receive particular licenses to promote superior processors used for synthetic intelligence purposes to Chinese language corporations.
Congress handed laws in July that would offer US semiconductor producers with a pool of $52bn to assist growth of the home chip business 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 tools maker.
“It’s fairly stunning that Apple is partnering with a Chinese language expertise firm . . . which is in precisely the identical business as the opposite banned corporations and has the direct assist of the highest CCP management,” mentioned Zach Edwards, an unbiased tech knowledgeable.
Further reporting by Eleanor Olcott in Hong Kong