Huawei seeks stable chip supply from Samsung and Hynix

Huawei Technologies Co. has sought high-level assurances from Samsung Electronics Co. and SK Hynix Inc. they will continue to supply memory chips despite 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 ensure a stable supply of the semiconductors regardless of recent U.S. government restrictions, the report said, citing unidentified industry sources.

Representatives for the two Korean companies denied the report on Monday as Samsung said such meetings had not taken place, while Hynix didn’t elaborate.

Huawei is one of the five biggest clients for Samsung and SK Hynix, spending around 10 trillion won ($8.1 billion) to buy DRAM and NAND flash memory chips from the Korean companies every year, the newspaper said.

The report 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 chipmakers 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% of the DRAM 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 for a worsening scenario.