Huawei is trying to ensure stable chip supply from Samsung and SK Hynix

Huawei was put on the Entity List by the U.S. government in May last year and recently, the ban was further extended by another year. A few days ago, the United States tightened export controls in a move that is aimed at limiting Huawei’s access to chip supplies.

Now, the Chinese giant is seeking help from the likes of Samsung Electronics and SK Hynix for continued supply of memory chips despite mounting pressure from the United States as the Trump administration tries to isolate Huawei.

As per the reports, Huawei is one of the biggest clients for Samsung and SK Hynix as the company spends more than 10 trillion won (around $8.1 billion) for purchasing DRAM and NAND flash memory chips from the South Korean companies.

While memory chipmakers aren’t subject to the restrictions recently announced by the United States but Huawei is worried that such move could come in later and the Chinese company is preparing for the same.

The U.S. Commerce Department announced that the all the chip manufacturers using American chipmaking equipment, intellectual property or design software needs to apply for a license before shipping chips to Huawei. Soon after this new rule was announced, TSMC, the world’s largest contract chipset maker stopped taking new orders from Huawei.

In response to this, China’s Department of Commerce said that it strongly objects to the tighter U.S. export controls and added that such restrictions pose a huge threat to the global supply chain. It also demanded U.S. to reverse the new restrictions and warned to take necessary countermeasures.

Commenting on this new rule from the U.S., Andy Purdy, the US Chief Security Officer for Huawei, said that the company will survive this event and will eventually adapt to this and added that the problem will mostly be borne by American employees and companies.

(Via)

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