Samsung and SK Hynix will stop selling components to Huawei amid tightening the US administration’s sanctions on Chinese phone makers. According to Chosun Ilbo and some South Korean news agencies, companies will suspend transactions from September 15, when the restriction on sales with Huawei comes into effect.
According to The Verge, the sanctions were introduced in August following a series of restrictions implemented from 2019. Accordingly, the Donald Trump administration banned companies outside the US from selling components made with US technology for Huawei, unless specifically approved.
This is a serious threat to the Chinese technology company, Huawei facing the danger of not being able to produce Kirin chipsets. In contrast, the partners also suffered huge losses when they lost the contract to supply components to the world’s largest smartphone manufacturer in the second quarter of 2020.
Taiwan Semiconductor Chip Corporation TSMC stopped trading with Huawei in May, after imposing restrictions on it. Huawei calls the rules set by the US administration “arbitrary and cruel”.
The Chinese government supports SMIC, the country’s largest semiconductor chip maker, to act on behalf of other partners to supply Huawei components. However, the administration of Donald Trump has also threatened to punish SMIC. Before that information, the Chinese Foreign Ministry accused the US of “blatant hegemony”.
Due to the US embargo pressure, Huawei has less and less choice to source components to manufacture phones. However, there have been reports that Qualcomm – an American chip company – has lobbied the authorities to lift the restrictions and allow it to deal with the Chinese corporation.
The administration of the Donald Trump has argued that Huawei’s telecom infrastructure poses a national security threat, accusing it of stealing trade secrets and violating Iran sanctions.
The Huawei embargo is part of a larger trade war between China and the US. Recently, tensions between the two sides continued to escalate when Mr. Trump ordered TikTok to voluntarily sell himself to the country’s company, then announced to block transactions with WeChat.