Why iPhone 14 may be in short supply for Indians

Apple was planning to use state-funded YMTC’s NAND flash memory chips as early as this year, Nikkei said, citing people familiar with the matter. The chips were initially planned to be used only for iPhones sold in the Chinese market. With the new sanctions by the US government, the company has put on hold the plans, impacting iPhones’ shipment and sales in other countries. This is likely to impact the Indian market as well. Already, some iPhone 14 units are already shipping very late to customers.

Nikkei said that the iPhone maker was considering eventually purchasing up to 40% of the chips needed for all iPhones from YMTC. This is because YMTC chips are at least 20 per cent cheaper than those of its leading rivals. The US company was even planning to use its 128-layer 3D NAND flash memory chips for 40 per cent of iPhones.YMTC’s chips have not yet been used in Apple products so far, Nikkei’s report adds.

The latest restrictions on YMTC chips may further push Apple to look for other alternative markets for its products manufacturing and assembly. It is already planning to move product assembly units from China to India and Vietnam. As per analysts at the JPMorgan, Apple’s dependency on China would drop significantly by 2025.

For the unversed, YMTC is a government-funded firm. Its chips help Chinese firms to reduce dependency on rival chip companies based in Japan and South Korea. The US government last week added YMTC and 30 other Chinese entities to a list of companies that US officials have been unable to inspect, ratcheting up tensions with Beijing, starting a 60 day-clock that could trigger much tougher penalties. While this was not enough, the US commerce department is also investigating YMTC over whether it violated Washington’s export controls by selling chips to blacklisted Chinese telecommunications company Huawei Technologies Co Ltd.