According to the latest news, Samsung and SK Hynix will reportedly stop selling components to Chinese tech giant Huawei because the Trump administration is tightening its sanctions on the Chinese phone maker.
Chosun Ilbo and other Korean news outlets reported that the companies will suspend trade from 15th September 2020. From that day, a new set of rules will limit all business deals with Huawei. You must know that these sanctions were introduced back in August. The whole issue started not from August but from last year. Plenty of other restrictions were also implemented since then limiting Huawei business expansion in America.
After ordering the American companies directly, indirectly, the pressure was built on non – American companies as well so that they suspend their business relationship with Huawei. Now, some strict rules ban non – American tech companies to sell their components that were developed with US technology. Now, if some companies still want to keep their business with Huawei then they have to obtain special approval. In simple words, this poses a serious threat to Huawei. The company declared that they won’t be able to make its reputed Kirin chipsets any longer.
On the other hand, Huawei’s business expansion is valuable to many other companies because, in recent times, it became one of the top-selling smartphone manufacturers of the world.
As of now, Taiwanese chipmaker TSMC reportedly suspended sales to Huawei from May after an earlier round of restrictions. The Chinese tech giant considered these rules as “arbitrary and pernicious.”
It must be noted that already, the Chinese government has funded a domestic semiconductor company, SMIC. This company was offered as an alternative supplier for Huawei. In the US, the Trump administration has also threatened sanctions against SMIC.
Due to these, a lot of diplomatic relationships is hurt between not only China and the US but the whole world. The Chinese Foreign Ministry accused the US of “blatant hegemony” because now, Huawei has only a handful of options left with it for sourcing parts for its phones. It is being circulated in the tech circle that American chipmaker Qualcomm has reportedly lobbied the Trump administration to lift restrictions on Huawei and let it continue its business relation with the Chinese tech manufacturing company.
Even today, the US government maintains that Huawei possesses a national security threat as it has engaged in a secret trade theft and violated sanctions against Iran. A major part of the US-China trade war happened with Huawei as the central character or main event. Countries around the world have started banning Chinese apps like TikTok and WeChat. With increasing restrictions, this Huawei ban event has the potential of reshaping the whole smartphone and chip market.