If Apple buys memory chips from a Chinese manufacturer, it will face intense scrutiny from Congress.
Marco Rubio, Republican vice-chair of the Senate Intelligence Committee, and Michael McCaul, the top Republican on the House Foreign Affairs Committee, said they were alarmed by a media report that Apple would add a Chinese company to its supplier list.
Apple is playing with fire. The security risks posed by YMTC are known. It will be subject to scrutiny from the federal government if it goes forward. We can't allow Chinese companies to get into our networks.
When asked about the congressional concerns, Apple said it didn't use YMTC chips in any of its products, but was looking into the possibility of using Nand chips in some of its China-made phones.
Apple said it wouldn't use YMTC chips in phones outside of China. All user data stored on Nand chips was fully secured, it said.
The White House and Commerce Department were looking into allegations that YMTC was violating US export control rules by supplying chips to a Chinese company.
The Chinese Communist party and military have a close relationship with YMTC. McCaul said there was evidence that YMTC was breaking export control laws. Apple's transfer of knowledge and knowhow to YMTC will help the CCP achieve its goals.
A person familiar with the situation says that Chuck Schumer has raised concerns with Gina Raimondo about YMTC.
YMTC did not reply to the request for comment.
In July, a bipartisan group of senators, including Schumer and Warner, urged the Biden administration to put YMTC on a Commerce Department blacklist that would bar US companies from providing technology to the Chinese group.
AdvertisementJames Risch, the top Republican on the Foreign Relations Committee, said that YMTC should be put on theentity list because it was violating export control rules.
Beijing was accused of subsidizing YMTC in ways that would help it dominate the sector by selling chips below cost, as China has done in other areas such as the solar industry.
They wrote that YMTC was an immediate threat.
The Commerce Department was aware of the concerns and was preparing a response, according to one person.
The Bureau of Industry and Security is conducting a review of China-related policies that may seek to employ a variety of legal, regulatory, and enforcement tools to keep advanced technologies out of the wrong hands.
McCaul is set to become head of the House Foreign Affairs Committee if the Republicans win control of the lower chamber of Congress.
The company will undermine the market. He said that this could destroy the memory chip market and give China more control. The world's data is stored on a chip made by a national champion.
Several people familiar with the situation said that Apple had been asked about YMTC-related speculation, but had not responded. The congressional inquires were not commented on by Apple.
The Biden administration is making it harder for China to obtain cutting-edge technology. US officials recently told the two US chipmakers that they would have to get special licenses to sell their chips to Chinese companies.
Congress passed legislation in July that would give US Semiconductor manufacturers with a pool of $52 billion to support development of the domestic chip industry.
The importance of YMTC for China was underscored by the visit of the president to the company.
"It's pretty shocking that Apple is partnering with a Chinese technology company... which is in exactly the same industry as the other banned companies and has the direct support of the topCCP leadership."
Eleanor Olcott reports in Hong Kong.
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