Samsung Cutting Off Chip Sales to Huawei Next Week: REPORT

In the latest blow to Huawei, South Korean chip manufacturers Samsung and HK Hynix will reportedly cease all trades with the Chinese company beginning next week.

According to South Korean newspaper Chosun llbo (via The Verge), Samsung and memory manufacturer SK Hynix plan to suspend selling parts to the Chinese company on September 15th — the same day new restrictions the US Commerce Department announced partway through August go into effect.

Huawei is already dealing with even more sanctions that were put in place in the middle of August. These sanctions have continued from the previous ones from the middle of 2019. To put it simply, the trade restrictions are preventing the non-US companies from trading as well as selling smartphone components and hardware to Huawei, mainly if the said components were developed using US technologies and processes.

This means that Huawei is going to face more issues when Samsung finally cuts the supply, because they have stated that sooner or later, they are going to run out of silicon and as more firms stop selling to Huawei, Huawei will be left with nothing to produce.

Huawei has generally turned to LG and Samsung, along with China’s own BOE for its display needs. So removing LG and Samsung from the equation means that BOE will likely need to pick up the slack. However, the report also adds that Huawei is testing displays from local companies like Visionox, Tianma, and CSOT.

Samsung is expecting the impact of the halt to be minimal as Huawei is just one among many of its clients, the report’s sources said, as the company supplies its memory chips to Apple and other major Chinese smartphone makers. SK Hynix, on the other hand, is expecting its sales to be impacted heftily from the halt, they said.

Other companies in Asia that are part of Huawei’s supply chain are also expecting to end their dealings with the embattled Chinese company. Chip-making giant Taiwan Semiconductor Manufacturing Co (TSMC) confirmed in July that it had suspended new orders from Huawei and is expected to halt Huawei’s supplies this month.