Due to political pressure, Apple will no longer use Chinese chips in its iPhones.
Because of tighter regulations affecting Chinese IT businesses, Apple cancelled its intentions to incorporate flash memory chips produced by Yangtze Memory Technologies Co. in its devices.
With intentions to begin employing the chips this year, Apple has already finished testing to approve YMTC's 128-layer 3D NAND flash memory for use in its iPhones.
The 128-layer chips from YMTC are 20% less expensive than those from Micron and Samsung, but they are also one or two generations older.
The YMTC memory was initially intended to be used in Chinese iPhones, but Apple later thought of obtaining up to 40% of the NAND flash memory required for all iPhones from YMTC.
US authorities criticised the agreement that saw the tech giant Apple partner with the government-funded firm YMTC.
YMTC was added to the "Unverified List" on October 7 even though it is not one of the Chinese firms that are prohibited, which means that U.S. officials are unable to confirm a clear chain of its end-users.
However, without a licence, US corporations are not permitted to communicate any designs, technology, documents, or specifications with Chinese entities on the Unverified List.
According to a source who spoke to Nikkei Asia, "The goods have been validated, but they did not proceed into the manufacturing lines when mass production of the new iPhone began."
Government subsidies enable YMTC to significantly undercut rivals' prices.
Even though Apple can still find the less expensive memory, the political headache is obviously not worth it for them.