USA vs. China: Apple suffers from US economic sanctions

The economic war between China and the USA is in a hot phase. This is becoming increasingly noticeable in the chip technology sector in particular. But it is by no means only Chinese companies that are suffering. US companies like Apple are also feeling the effects of the sanctions indirectly. For example, the tech company will now probably have to look for an alternative supplier for its iPhones sold in China.

Economic war becomes a burden for Apple

Actually, it should not be the intention of the US government to harm successful companies like Apple by imposing sanctions against China. But this seems to be exactly the case at the moment. The background is the rapidly growing demand for iPhones in China. Due to the increasingly strong middle class in the Middle Kingdom, more and more people there also want to own Apple’s premium smartphone. In order to produce higher volumes, Apple therefore wanted to use chip technology from the Chinese company Yangtze Memory Technologies Co. (YMTC). However, this plan does not seem to be crowned with success.

After all, since YMTC is severely weakened by the US trade restrictions, it simply lacks capacity. Thus, like many other technology companies in China, the company can hardly import necessary components from Western countries. Now Apple has no choice but to return to its old regular producer. The tech company has always purchased 3D NAND technology for its China business from Samsung, which is based in South Korea. Coordinating production is likely to be particularly strenuous for Apple now. After all, YMTC’s technology should account for 40 percent of the total volume.

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Hype for the iPhone is growing rapidly

The iPhone never had the status of a classic smartphone in China. Rather, this is a kind of status symbol that was reserved only for the very few in the country just a few years ago. This circumstance has changed radically in view of the better income situation. People now increasingly want to buy the smartphone from Apple. So far, this does not seem to be a thorn in the side of the Chinese government. This is quite astonishing when you look at the way US policy deals with Huawei. The Chinese company was strictly prohibited from selling its own products in the US as a result of the US sanctions. It is possible that the Chinese policy wants to avoid discontent due to a sales ban of the popular iPhone.