Huawei is feeling the effects of the increased trade restrictions from the US. The chip contract manufacturer TSMC had already ceased trading with Huawei, but other large companies from the semiconductor industry are now following suit.
According to reports from the South Korean magazine Chosun Biz Samsung’s memory division and SK Hynix stop selling DRAM chips like LPDDR4 to Huawei. Also deliver Chosun Biz According to Samsung’s display department and LG, no more display panels on Huawei.
Displays from BOE and Co.
Chinese manufacturers offer alternatives, but not always in sufficient quantities. For example, Huawei is already buying displays in large quantities from Beijing BOE Display Technology – smaller competitors such as Visionox, Tianma and China Star Optoelectronics Technology (CSOT) are now supposed to take up the stake from Samsung and LG. It is primarily about OLED panels.
On the storage side, on the other hand, things could get tighter because China is only just ramping up domestic production. Last year, for example, serial production of DRAM started at ChangXin Memory Technologies (CXMT), one of the largest Chinese memory manufacturers.
Samsung cooperation with the USA
Most recently, Samsung Semiconductor was traded as a possible manufacturing partner for Huawei’s subsidiary HiSilicon. If the Samsung sister companies now stop their business relationships, a cooperation seems increasingly unlikely. Especially since Samsung is benefiting from the trade war elsewhere: A five-year cooperation with mobile operator Verizon to expand the US 5G network flushes about $ 6.6 billion into its own coffers.
In any case, Huawei would have to rely on exemptions from the US authorities in the future, even with an independent manufacturing partner, since common processor logic blocks such as display controllers come from US companies, including Synopsys. Qualcomm and MediaTek are meanwhile trying to get approval to sell complete systems-on-chip (SoCs) to Huawei.
Falling DRAM prices
Meanwhile, Samsung and SK Hynix’s freeze on sales could hit retailers with oversupply in the following months. Huawei is said to make up about 15 percent of SK Hynix’s sales and 6 percent of Samsung’s memory division. The market observer DRAM Exchange expects DRAM prices to fall for the rest of the year. In the past few months, the so-called spot prices outside of fixed delivery contracts have increased, as Huawei had apparently stocked up on DRAM chips.