Apple may buy NAND chips from China’s Yangtze Memory Technologies Corporation following the loss of production at the Kioxia/Western Digital joint venture foundries due to chemical contamination.
Bloomberg reports that Apple is testing NAND chips from Tsinghua Unigroup-owned Yangtze (YMTC) and has been locked in negotiations over a potential supply agreement for several months, indicating those talks with Yangtze started before the contamination accident at the Kioxia/WD fab in February.
An AppleInsider report suggests discussions started in early 2018 with reference to NAND chips for iPhones sold in China – Apple sold 49.4 million handsets in the Middle Kingdom in 2021.
Kioxia/WD chips are used in Apple’s iPhone and other devices. The iGiant made up for the lost production with orders from Samsung and SK hynix and is now looking to lessen its dependency on Kioxia and WD in order to maintain supply chain consistency and dependability. It has also had NAND supply deals with Micron and Samsung.
A volume deal with Apple would enormously improve YMTC’s standing in the world as a NAND supplier. It makes string-stacked 128-layer NAND (2x 64 layer die design) using Xtacking technology with separate controller logic chips and NAND chips. According to TrendForce research, YMTC accounted for about one per cent of total NAND capacity in 2020 and circa four per cent in 2021.
YMTC is behind the curve with regard to 3D NAND layer count where, basically, the more layers you have the lower the cost/bit of your die. The 128 layers in YMTC’s technology is an earlier generation than the 144 used by Solidigm, the 162 used by Kioxia and WD, and the 176 by Micron, Samsung and SK hynix. Another negative factor could be parent Tsinghua Unigroup’s bankruptcy process, potentially compromising YMTC’s financial stability.
DigiTimes, quoting industry sources, reports that YMTC NAND has passed Apple validation tests with small volume shipments to start in May.
However, Apple setting up a supply deal with a Chinese NAND manufacturer would run counter to US trade policy and the nation’s ambition to become less dependent on Chinese-sourced technology.
Blocks & Files thinks that a major Apple-YMTC supply agreement is unlikely due to Tsinghua Unigroup’s financial status and YMTC’s old technology – although talk of an agreement may help Apple’s negotiations with other NAND suppliers. A supply agreement with Solidigm, now that it is no longer part of Intel, would give Apple a US NAND supplier with more modern technology.
Neither Apple nor YMTC responded to media inquiries.
