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Republican lawmakers have warned Apple that it’s going to face intense scrutiny from Congress if the California firm procures reminiscence chips from a controversial Chinese language semiconductor producer for the brand new iPhone 14.
Marco Rubio, Republican vice-chair of the Senate intelligence committee, and Michael McCaul, the highest Republican on the Home overseas affairs committee, mentioned they have been alarmed following a media report that Apple would add Yangtze Reminiscence Applied sciences Co to its listing of suppliers for Nand flash reminiscence chips which might be used to retailer information on smartphones.
“Apple is taking part in with hearth,” Rubio advised the Monetary Instances. “It is aware of the safety dangers posed by YMTC. If it strikes ahead, it will likely be topic to scrutiny prefer it has by no means seen from the federal authorities. We can’t enable Chinese language corporations beholden to the Communist occasion into our telecommunications networks and thousands and thousands of People’ iPhones.”
Requested in regards to the congressional issues, Apple advised the FT it didn’t use YMTC chips in any merchandise however mentioned it was “evaluating sourcing from YMTC for Nand chips for use in some iPhones bought in China”.
Apple mentioned it was not contemplating utilizing YMTC chips in telephones on the market outdoors China. It added that every one consumer information saved on Nand chips utilized by the corporate have been “totally encrypted”.
The FT reported in April that the White Home and commerce division have been investigating claims that YMTC was violating US export management guidelines by supplying chips to Huawei, the Chinese language telecoms gear group.
“YMTC has intensive ties to the Chinese language Communist occasion and navy. There’s credible proof that YMTC is breaking export management legal guidelines by promoting items to Huawei,” McCaul advised the FT. “Apple will successfully be transferring data and knowhow to YMTC that can supercharge its capabilities and assist the CCP obtain its nationwide targets.”
Chuck Schumer, the Democratic Senate majority chief, has additionally privately raised issues with commerce secretary Gina Raimondo about YMTC, in line with an individual acquainted with the scenario.
YMTC didn’t instantly reply to a request for remark about its relationship with Apple.
In July, a bipartisan group of senators — together with Schumer and Mark Warner, the Democratic chair of the Senate intelligence committee — urged the Biden administration to place YMTC on a commerce division blacklist that might successfully bar US corporations from offering expertise to the Chinese language group.
The senators, who included James Risch, the highest Republican on the overseas relations committee, mentioned YMTC needs to be placed on the “entity listing” because it was violating export management guidelines by promoting reminiscence chips to Huawei.
The lawmakers additionally accused Beijing of subsidising YMTC in ways in which would assist put the “nationwide champion” on monitor to dominate the sector by promoting chips under price, as China has completed in different areas such because the photo voltaic business.
“YMTC is a direct risk,” they wrote to Raimondo.
One particular person acquainted with the commerce division’s stance mentioned it was conscious of the issues and was getting ready a response to the senators.
A spokesperson mentioned the division’s Bureau of Business and Safety was conducting a assessment of China-related insurance policies that might “probably search to make use of a wide range of authorized, regulatory, and, when related, enforcement instruments to maintain superior applied sciences out of the fallacious fingers”.
McCaul, who is ready to turn out to be head of the Home overseas affairs committee if the Republicans win management of the decrease chamber of Congress in November’s midterm elections, mentioned the Chinese language subsidies to YMTC posed a risk.
“Huge CCP subsidies to YMTC imply the corporate will undercut the market. This might very possible devastate the reminiscence chip market and provides China much more management of this important nationwide safety expertise,” he mentioned. “How can the world’s information be safe if it’s saved on a chip made by a CCP nationwide champion?”
A number of individuals acquainted with the scenario mentioned lawmakers had requested Apple in latest months about YMTC-related hypothesis however bought no response. Apple didn’t touch upon the congressional inquiries.
The criticism of Apple comes because the Biden administration steps up efforts to make it tougher for China to safe cutting-edge expertise. US officials recently told Nvidia and Superior Micro Units — two US chipmakers — that they must acquire particular licenses to promote superior processors used for synthetic intelligence purposes to Chinese language corporations.
Congress passed legislation in July that would offer US semiconductor producers with a pool of $52bn to help growth of the home chip business and scale back reliance on overseas corporations.
Underscoring the significance of YMTC for China, President Xi Jinping visited the corporate in 2018 after Washington slapped robust restrictions on Huawei and ZTE, one other Chinese language telecoms gear maker.
“It’s fairly stunning that Apple is partnering with a Chinese language expertise firm . . . which is in precisely the identical business as the opposite banned corporations and has the direct help of the highest CCP management,” mentioned Zach Edwards, an unbiased tech knowledgeable.
Extra reporting by Eleanor Olcott in Hong Kong
Observe Demetri Sevastopulo, Patrick McGee and Eleanor Olcott on Twitter
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