US senators have asked the intelligence community to study the threat posed by a potential deal between Apple and Chinese chip maker Yangtze Memory Technologies Co. to national security, escalating political pressure on the iPhone maker over the arrangement.
Mark Warner, the Democratic chair of the Senate Intelligence Committee, and Republican Vice President Marco Rubio wrote to Director of National Intelligence Avril Haines requesting a review just days after the Financial Times announced that Apple was considering purchasing memory chips from YMTC for the new device. iPhone 14.
“We are writing to express our grave concern that Apple Inc. may soon purchase 3D Nand memory chips from Yangtze Memory Technologies Co,” the senators said. “Such a decision would expose significant privacy and security vulnerabilities to the global digital supply chain that Apple is helping to shape given the YMTC’s extensive, but often opaque, ties to the Chinese Communist Party.”
The FT reports that YMTC has supplied Huawei, the controversial Chinese telecoms equipment giant, with at least two phones, including its flagship foldable Mate Xs 2. This would be a potential violation of US export controls that effectively prevent companies from doing so. Provide products containing American technology to Huawei.
Government and industry experts assume that all Chinese chip makers use American technology because American chip design programs and manufacturing tools are ubiquitous in all semiconductor supply chains.
Apple recently told the Financial Times 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 Senate Majority Leader Chuck Schumer and John Cornyn, a Republican from Texas.
Senators asked Haines to review the risks that the Apple-YMTC deal could pose to economic and national security. They asked her to consider how the Chinese Communist Party could use YMTC to boost the domestic chip industry and displace semiconductor manufacturers from the United States and allied countries. They also asked to examine the role the YMTC allegedly plays in helping Chinese companies, including Huawei, evade US sanctions.
YMTC is just one of many Chinese technology groups that have come under increasing scrutiny in Washington. National Security Adviser Jake Sullivan said last week that the United States should re-evaluate its long-standing hypothesis that it must maintain a “relative” advantage over competitors, including in chips, where it had “previously maintained a ‘gradualist’ approach that said we I only need to stay two generations ahead.”
“This is not the strategic environment we live in today,” Sullivan told SCSP, a think-tank focused on promoting American technology in critical areas. “Given the foundational nature of certain technologies, such as advanced logic and memory chips, we must maintain as much leadership as possible.”
The US Commerce Department is working on a set of measures that would make it difficult to export some chip-related technology to China in an effort to slow its efforts to build up its domestic industry.
Additional reporting by Patrick McGee. Follow Demetrius Sevastopol on Twitter
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