Samsung, SK, and LG to Stop Selling Chips and Display Panels to China’s Huawei

Another source of technology to China’s Huawei is about to be closed:

After U.S. Secretary of State Mike Pompeo’s request for countries to join Washington’s move to restrict the direct or indirect use of U.S. technology by Huawei, its top Korean suppliers are rethinking their partnerships with the Chinese tech company.

Pompeo said in a press statement Aug. 17 that Washington urges its allies and partners to join its anti-Huawei campaign. 

“The Department of State strongly supports the Commerce Department’s expansion of the Foreign Direct Product Rule, which will prevent Huawei from circumventing U.S. law through alternative chip production and provision of off-the-shelf (OTS) chips produced with tools acquired from the United States,” Pompeo said in the statement.

The Commerce Department also added 38 Huawei affiliates to its Entity List, which identifies foreign parties prohibited from receiving certain sensitive technologies, while allowing Huawei’s Temporary General License (TGL) to expire. 

The United States has provided ample time for affected companies and people ― primarily Huawei customers ― to identify and shift to other sources for equipment, software and technology and wind down their operations, the statement said, adding, that time was up.

A few weeks after the statement, industry officials said Huawei’s top Korean suppliers ― Samsung Electronics, SK hynix, Samsung Display and LG Display ― were rethinking their partnerships with the Chinese firm and suspending sales of memory chips and high-end smartphone panels for use in its consumer products.

“Amid the tightening rules on Huawei by the Trump administration, there’s no option but to temporarily suspend the sale of components to Huawei,” a high-ranking industry executive told The Korea Times.

Huawei buys “billions of dollars” of memory chips and display panels annually from Samsung Electronics, SK hynix, Samsung Display and LG Display. The suspension of trade will be effective from Sept. 15, the day a new set of rules limits dealing with the Chinese company.

Korea Times

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