Apple looking Third supplier for their memory chips in iPhones

 Apple Inc. is exploring new sources of the memory chips that go into iPhones, including its first Chinese producer of the critical component, after disruption at a key Japanese partner exposed the risks to its global supply.

Apple is looking for a third supplier of its NAND memory chips. Apple's biggest contractor is Samsung, followed by SK Hynix. People familiar with the matter say that the Cupertino-based company is eyeing the Chinese semiconductor Yangtze Memory Technologies.

Created through a merger with a government-run chip factory in 2016, Yangtze Memory is regarded as China’s best shot at designing and developing homegrown 3D NAND flash memory, widely used for storing data in smartphones, laptops, servers, and future gadgets such as electric vehicles.

Apple’s iPhones are put together primarily in China by Foxconn Technology Group and Patron Corp., which take components like memory chips from scores of different providers before assembling them into the final device. Yangtze Memory could offer an attractive source of cheaper chips close to their plants.

“Yangtze memory will supply about 5% of memory for iPhone SE, and 3% to 5% of memory for the upcoming iPhone 14. Apple is using its product because it offers competitive pricing,” projected Jeff Pu, an analyst with Haitong International Securities, working off theoretical estimates.

On the other hand, Yangtze's chip design is one generation behind Samsung's and other memory chip makers. So this in turn means that Apple will use Yangtze's NAND flash for its entry-level handsets, such as this year's iPhone SE.