On Thursday U.S. Senator Tom Cotton (R – AR) sent a letter to Apple CEO Tim Cook urging him not to engage in business with Yangtze Memory Technologies Corporation (YMTC).
YMTC is a Chinese state-owned corporation that manufactures microchips and semiconductors. The company is headquartered in Wuhan.
As a state-owned corporation, YMTC presumably would fall under tremendous influence from the Chinese Communist Party.
Sen. Cotton’s statement notes that YMTC collaborates with Chinese companies sanctioned by the U.S. government for human rights abuses and for collaborating with the People’s Liberation Army (PLA) on military-modernization projects in China.
According to the U.S. Department of State, the Chinese Communist Party is using an aggressive strategy of “military-civil fusion” (MCF) to build its military.
By fusing civil projects with military projects, the Chinese Communist Party uses advancements in civilian technology — such as microchips — to simultaneously advance its military technology.
The Chinese Communist Party hopes military-civil fusion will give China the most technologically advanced military in the world.
This is not the first time Apple has made headlines over its business dealings in China.
For example, last year the company quietly removed the Bible and Qur’an from its app store in China at the request of the Chinese Communist Party.
As we have written before, the Chinese Communist Party has blocked internet access for its people, caused food shortages in its own country, begun acquiring farmland in other countries, engaged in espionage, allegedly tried to influence public policy in America, and imposed forced abortions and sterilizations on minorities.
With that in mind, it is deeply concerning to many Americans when tech giants like Apple engage in business with state-owned corporations in China.
Below is a copy of the statement and letter from Sen. Cotton.
Washington, D.C. — Senator Tom Cotton (R-Arkansas) sent a letter today to Apple CEO Tim Cook warning him of the dangers that using chips from Yangtze Memory Technologies Corporation (YMTC) in Apple products poses to U.S. national security, consumer data security, and to Apple’s reputation and shareholders. The letter requested answers on why Apple made this reckless decision and what steps Apple planned to take to protect the United States and American consumers from the Chinese Communist Party (CCP).
In part, the senator wrote:
“I urge you to rethink Apple’s decision to do business with YMTC. If Apple continues to court untrustworthy Chinese companies like YMTC, it will do grave harm to its shareholders, its customers, and our country. As there is bipartisan support to address the threat posed by YMTC, I must stress for you and your shareholders the risks of this partnership with an entity that may soon be the target of U.S. government action.”
Full letter of the text may be found here and below.
September 15, 2022
Mr. Tim Cook
Chief Executive Officer
One Apple Park Way
Cupertino, CA 95014
Dear Mr. Cook,
I write regarding Apple’s ill-advised plans to do business with a dangerous Chinese chipmaker, Yangtze Memory Technologies Corporation (YMTC).
YMTC is a key player in the Chinese Communist Party’s (CCP) campaign to dominate the semiconductor industry. YMTC has seized market share thanks to an estimated $24 billion in government subsidies. These subsidies have allowed YMTC to poach engineers and sell its flash-memory products below cost, to the detriment of firms in the United States and allied countries. YMTC also collaborates with Chinese companies sanctioned by the U.S. government for human rights abuses and collaboration with the People’s Liberation Army (PLA) on military-modernization projects. As a result, members of Congress from both parties have called on the Biden administration to add YMTC to the Entity List, and the Commerce Department may blacklist the company.
China has made great strides in strategic sectors like semiconductors due to subsidies and outright theft, but so far, its national champions lack legitimacy—and rightfully so. Your company’s decision may change that.
I urge you to rethink Apple’s decision to do business with YMTC. Apple and far too many other American companies already rely on China for manufacturing and supplies. Adding another Chinese company to Apple’s supply chain, particularly one with close ties to the CCP and PLA, compounds these risks. If Apple continues to court untrustworthy Chinese companies like YMTC, it will do grave harm to its shareholders, its customers, and our country. As there is bipartisan support to address the threat posed by YMTC, I must stress for you and your shareholders the risks of this partnership with an entity that may soon be the target of U.S. government action.
With these concerns in mind, I request that you answer the following questions:
1. Can Apple confirm that their products using YMTC chips will not be available for purchase in the U.S. market or through any e-commerce platform available in the United States? If not, what safeguards does Apple have in place to protect U.S. national security and consumer data security from the CCP?
2. Did Chinese authorities require Apple to use YMTC’s chips as part of its new iPhone 14? If not, on what basis did Apple make its decision to use YMTC chips, despite the threat posed by YMTC?
3. How did YMTC’s ties to companies sanctioned for human rights abuses factor into Apple’s decision?
4. Have members of Apple senior leadership considered the risk resulting from Apple making itself reliant on an entity that is likely the target of future U.S. government action?
United States Senator
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