Fear of iPhone chip shortage spurs Apple trip to Korea

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2019 iPhone
Apple does not want to run short on chips for its newest iPhones.
Photo: Marques Brownlee

Apple reportedly flew a team to Seoul as the tech giant sweats a trade dispute between South Korean and Japan that could lead to a shortage in iPhone chips and OLED panels.

The meeting with Samsung, the main supplier of memory chips for iPhone, also included executives from Google, Microsoft and Amazon. Those three companies contract with Samsung for memory chips used in data centers for cloud services.

“The officials (from the US tech firms) were not here just to review their existing contracts with Samsung, but also to monitor the current market conditions hereafter Japan recently implemented trade restrictions,” an unnamed source with knowledge of the matter told The Korea Herald. “They discussed the current situation with Samsung officials.”

Earlier this month, Japan tightened exports on three chemicals used for making memory chips and OLED panels. It did so in response to a Korean court’s ruling that Japan’s Nippon Steel must compensate Korean victims of forced labor during World War II.

The three chemicals, which had fast-track status through customs, are now subject to a 90-day permit process, which could hinder Samsung’s ambitious production schedule. The materials are used in the making of RAM and flash memory chips.

It is unclear whether Apple has the chip and OLED panel inventory in place to meet the demand for the 2019 lineup of iPhones due out this fall.

Another Korean publication, BusinessKorea reported on Wednesday that U.S. diplomats may intervene in the dispute.

Source: The Korea Herald