Larry Berman: Expect more as U.S. cracks down on Huawei
Huawei Technologies Co. has asked Samsung Electronics Co. and SK Hynix Inc. for a stable memory chip supply despite apparently mounting pressure from the U.S. to isolate the Chinese telecommunications company, the Korea Economic Daily reported.
The Shenzhen-based company called in senior officials at the two South Korean chipmakers’ Chinese units to request a stable supply of the chips regardless of the recent U.S. government move, the report said, citing unidentified industry sources. Huawei is one of the five biggest clients for Samsung and SK Hynix, spending around 10 trillion won (US$8.1 billion) to buy DRAM and NAND flash memory chips from the Korean companies every year, the newspaper said.
The request comes amid rising pressure against global suppliers after U.S. President Donald Trump barred any chipmaker using American equipment from supplying Huawei without U.S. government approval.
While memory chip makers aren’t subject to the U.S. government restrictions, Huawei worries that the Trump administration could widen its restrictions later, according to the report.
As the two South Korean companies supply more than 70 per cent of the DRAM memory chips globally, including them in any U.S. action would threaten the survival of the Chinese company, said the newspaper. It cited an industry official it didn’t identify as saying that Huawei is quickly building its memory-chip inventory in preparation of a worse scenario.