These Japanese Firms Are Among Biggest Victims of U.S. Ban on Huawei

Keiko Ujikane and Toshiro Hasegawa, Bloomberg News

BERLIN, GERMANY - MARCH 12: People walk past a Huawei customer service center on March 12, 2019 in Berlin, Germany. The U.S. government has warned Germany not to consider Huawei for the construction of Germany's new 5G mobile data network due to security fears. U.S. Ambassador Richard Grenell told the Germans that the U.S. would reconsider its sharing of intelligence with Germany if any Chinese companies supplied hardware for the German 5G network. (Photo by Sean Gallup/Getty Images) Photographer: Sean Gallup/Getty Images Europe , Photographer: Sean Gallup/Getty Images Europe

(Bloomberg) -- Japanese electronics component makers, such as Taiyo Yuden Co. and TDK Corp., are among the biggest victims of the U.S.-China trade war as the Trump administration bans U.S. companies from working with Huawei Technologies Co.

Taiyo Yuden stock tumbled about 26% this month, heading for its steepest monthly drop since June 2016, and TDK plunged 23%, set for the worst month since October 2008. They are among May’s worst decliners in the Nikkei 225 Stock Average. TDK is estimated to get about 10% of its sales from Huawei, Mizuho Securities Co. wrote in a report on May 17. Taiyo Yuden gets about 5-10% of revenues from the Chinese company, according to an updated Mizuho report on May 21.

Tech and chip shares have slumped as President Donald Trump ratcheted up his battle with China for dominance of 5G technology networks. The president signed an order last week that’s expected to restrict Huawei and fellow Chinese telecommunications company ZTE Corp. from selling their equipment in the U.S.

The turmoil may spread to more Japanese companies as the U.S. mulls cutting off the flow of vital American technology to five Chinese firms including Hikvision and Megvii, widening a dragnet beyond Huawei to include leaders in video surveillance.

“There’s a tendency that the technology battle between the U.S. and China will intensify,” said Masahiro Ayukai, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities Co. in Tokyo. “China is refraining from taking sanctions for now, but the market is staying alert.”

Here’s a list of Japanese equipment makers for electronic components and semiconductors that get a significant portion of their sales from Huawei:

(Source: Mizuho Securities Co.)

(Corrects story to include Mizuho’s latest data on sales contributions in second paragraph. This story was first published on May 23.)

To contact the reporters on this story: Keiko Ujikane in Tokyo at kujikane@bloomberg.net;Toshiro Hasegawa in Tokyo at thasegawa6@bloomberg.net

To contact the editors responsible for this story: Divya Balji at dbalji1@bloomberg.net, Naoto Hosoda, Teo Chian Wei