Apple’s consideration of Chinese-made memory chips for future iPhones drew a bipartisan warning from senior U.S. senators in September 2022, with lawmakers asking Director of National Intelligence Avril Haines to assess whether a supply deal with Yangtze Memory Technologies Co. would threaten U.S. national security.
The component at issue was 3D NAND memory, the storage technology Apple was said to be weighing for future iPhone models. In a letter, Sens. Mark Warner, Democrat of Virginia, and Marco Rubio, Republican of Florida, said Apple had publicly acknowledged that it was considering buying those chips from YMTC. Warner chaired the Senate Select Committee on Intelligence at the time, and Rubio was its vice chair.
Senate Majority Leader Chuck Schumer, Democrat of New York, and Sen. John Cornyn, Republican of Texas, also signed the letter. That made the message less a partisan flare-up than a fairly plain warning to Apple: Congress was watching the supply chain, not just the logo on the box.
The senators described YMTC as a state-owned Chinese manufacturer with extensive ties to the Chinese Communist Party and the People’s Liberation Army. They asked Haines to coordinate an intelligence community review of YMTC and publish an assessment that could be used by federal agencies and the public.
The lawmakers’ concern was not limited to whether Apple intended to use YMTC chips only in products sold in China or elsewhere. They argued that any Apple partnership with YMTC would strengthen Beijing’s industrial policy and undermine U.S. and allied chipmakers. The letter cited the Biden administration’s description of YMTC as China’s “national champion memory chip producer.”
What the senators wanted reviewed
Warner and Rubio asked intelligence agencies to examine several areas: how the Chinese government supports YMTC, whether the company helps other Chinese firms evade U.S. sanctions, what role it plays in China’s military-civil fusion program, and what risks an Apple procurement deal would pose to U.S. national and economic security.
The letter also said the senators had written to Commerce Secretary Gina Raimondo in July 2022 seeking YMTC’s addition to the Bureau of Industry and Security’s Entity List. Placement on that list restricts a company’s access to U.S. technology and suppliers.
According to the senators, YMTC had received nearly $24 billion in Chinese government subsidies since its founding in 2016. They said those subsidies helped YMTC grow quickly and prepare a second plant in Wuhan as early as the end of 2022. The lawmakers warned that subsidized production could let YMTC sell memory chips below cost and pressure competitors in a cyclical market already exposed to overcapacity.
The senators also pointed to April 2022 reports alleging that YMTC may have violated the U.S. foreign direct product rule by supplying smartphone and electronics components to Huawei. The letter did not present a finding that YMTC had done so, and framed that point as an allegation from reports.
The letter argued that an Apple contract could affect more than one supplier decision. Warner, Rubio, Schumer and Cornyn said YMTC’s success with a major Apple deal could endanger 24,000 U.S. jobs tied to memory chip production and weaken research and development opportunities in civilian and military memory technologies.
The senators requested a response from Haines by October 1, 2022.
This story draws on original reporting from Senator Warner.
