Huawei Reportedly Issues Chip Supply Request to Samsung as It Braces for More US Pressure

Last week, US officials reportedly indicated that they may further tighten the rules that aim to cut the Chinese tech giant Huawei off from global chip sales.

Huawei has asked the South Korean companies Samsung Electronics and SK Hynix for a stable memory chip supply in the face of Washington's "mounting pressure to isolate" the Chinese tech giant, Bloomberg reported on Monday citing The Korea Economic Daily.

The news outlet cited unnamed industry sources as saying that Huawei issued a relevant request to senior officials at the two South Korean chipmakers’ Chinese units. Representatives of Samsung Electronics and SK Hynix have denied the report. 

Bloomberg recalled that the Chinese tech behemoth remains one of the five biggest clients for these South Korean companies, and that Huawei is concerned over the Trump administration's possible further crackdown on the company, "quickly building its memory chip inventory in preparation of a worsening scenario".

The developments come after Huawei’s rotating chief executive Guo Ping admitted last week that the Chinese tech firm's "business will inevitably be impacted" by a recent US move to block shipments of semiconductors to the company.

"In spite of that, the challenges over the past year have helped us develop a thicker skin, and we are confident about finding solutions soon", Guo said, adding that Huawei would need some time to "understand the impact" of the latest US restrictions.

He spoke after the Chinese Ministry of Commerce pledged to protect "the legitimate rights and interests of Chinese enterprises" but kept mum on possible retaliation for Washington's move.

The state-run Chinese newspaper Global Times, in turn, cited an unnamed source as saying last week that Beijing is considering taking "forceful countermeasures" against the US move, which will allegedly include a clampdown on a number of major American companies, such as Qualcomm, Cisco, and Apple as well as the American plane maker Boeing.

The remarks followed China's Foreign Ministry urging the US to stop the "unreasonable suppression of Huawei", and slamming the Trump administration's actions as something that "destroys global manufacturing, supply, and value chains".

US Secretary of State Mike Pompeo, for his part, promised that Washington would continue restricting "most US exports to Huawei and its affiliates on the Entity List for activities that threaten the country’s national security and international stability".

US Tightens Screws on Huawei

Earlier, the US Department of Commerce announced a ban on the export of semiconductors from global chipmakers to the Chinese tech giant, noting in a separate statement that the department would extend a license that allows some American companies, particularly in rural US communities, to continue doing business with Huawei for another 90 days.

The move came amid the ongoing US crackdown on the Chinese firm which kicked off in 2019, when the Department of Commerce blacklisted Huawei, accusing the company of cooperating with China's intelligence services, allegations that both Beijing and the company vehemently reject.

Despite US pressure, Huawei touted "solid business performance" in its 2019 annual report, with sales topping $123 billion and net profits reaching $9 billion.