Apple reportedly encountered a temporary snag in its supply chain and is attempting to overcome it by obtaining iPhone memory chips from Samsung. A U.S. trade embargo prevents Apple from doing business with Chinese suppliers, so the technology behemoth will have to start sourcing its products from other producers.
In the future, Samsung will be required to pay up to 40% of Apple’s memory chip shipments for iPhones. Initially, Apple had planned to purchase 128-bit 3D NAND flash memory from the Chinese vendor Yangtze Memory Technologies (YMTC) and use it in iPhones marketed to Chinese consumers. Apple would have reportedly sourced about 40% of all iPhone memory chips from YMTC, assuming the deal had been approved.
According to Digi Times, the California-based company must now rely on Samsung, one of the biggest storage memory producers in the world, to fulfil about 40% of iPhone chip orders. Samsung already provides Apple with millions of iPhone 14 Pro and iPhone 14 Pro Max displays, so by placing additional orders with the Korean giant, Apple will be forced to rely more on its main smartphone rival.
As we previously reported, YMTC is no longer able to provide Apple with iPhone memory chips as a result of tighter export regulations. Given Samsung’s vast resources and the scale on which Apple operates, the two parties may come to an agreement whereby Samsung increases output while charging its partner less because of the potential volume of chip shipments it will give Apple.
Currently, the supply chain for Apple’s iPhone memory chips includes two Japanese companies, Western Digital and Kioxia, with a Korean company, SK Hynix, handling the remaining orders. We will learn in the future just how much Samsung can offer Apple in the upcoming months.