Republican lawmakers have warned Apple that it’ll 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, stated they have been alarmed following a media report that Apple would add Yangtze Reminiscence Applied sciences Co to its listing of suppliers for Nand flash reminiscence chips which might be used to retailer information on smartphones.
“Apple is taking part in with hearth,” Rubio advised the Monetary Occasions. “It is aware of the safety dangers posed by YMTC. If it strikes ahead, it is going to be topic to scrutiny prefer it has by no means seen from the federal authorities. We can’t 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 advised the FT it didn’t use YMTC chips in any merchandise however stated it was “evaluating sourcing from YMTC for Nand chips for use in some iPhones bought in China”.
Apple stated it was not contemplating utilizing YMTC chips in telephones on the market exterior China. It added that each one consumer information saved on Nand chips utilized by the corporate have been “absolutely encrypted”.
The FT reported in April that the White Home and commerce division have been investigating claims that YMTC was violating US export management guidelines by supplying chips to Huawei, the Chinese language telecoms tools group.
“YMTC has intensive 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 advised the FT. “Apple will successfully be transferring information and knowhow to YMTC that may supercharge its capabilities and assist the CCP obtain its nationwide targets.”
Chuck Schumer, the Democratic Senate majority chief, has additionally privately raised issues with commerce secretary Gina Raimondo about YMTC, in response to 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 might 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, stated YMTC needs to be placed on the “entity listing” 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 observe to dominate the sector by promoting chips under value, as China has achieved in different areas such because the photo voltaic trade.
“YMTC is an instantaneous menace,” they wrote to Raimondo.
One particular person acquainted with the commerce division’s stance stated it was conscious of the issues and was making ready a response to the senators.
A spokesperson stated the division’s Bureau of Trade and Safety was conducting a assessment of China-related insurance policies that might “probably search to make use of quite a lot of authorized, regulatory, and, when related, enforcement instruments to maintain superior applied sciences out of the fallacious palms”.
McCaul, who is ready 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, stated the Chinese language subsidies to YMTC posed a menace.
“Large 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 stated. “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 stated lawmakers had requested Apple in current months about YMTC-related hypothesis however bought 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 tougher for China to safe cutting-edge expertise. US officials recently told Nvidia and Superior Micro Gadgets — two US chipmakers — that they must get hold of particular licenses to promote superior processors used for synthetic intelligence purposes to Chinese language corporations.
Congress passed legislation in July that would supply US semiconductor producers with a pool of $52bn to assist growth of the home chip trade 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 surprising that Apple is partnering with a Chinese language expertise firm . . . which is in precisely the identical trade as the opposite banned corporations and has the direct assist of the highest CCP management,” stated Zach Edwards, an unbiased tech professional.
Extra reporting by Eleanor Olcott in Hong Kong
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