Huawei looks to secure memory chips from South Korean suppliers

US government recently tightened rules barring any chipmaker using American equipment from supplying Huawei without its approval

An advertisement for Huawei's Mate 30 5G smartphone in Beijing.  The company spends about 10 trillion Korean won (Dh25.75bn) on memory chips from South Korean companies a year. AFP 
An advertisement for Huawei's Mate 30 5G smartphone in Beijing.  The company spends about 10 trillion Korean won (Dh25.75bn) on memory chips from South Korean companies a year. AFP 

Huawei Technologies has asked South Korean companies Samsung Electronics and SK Hynix for a stable supply of memory chips despite mounting pressure from the US to isolate the Chinese telecommunications company, the Korea Economic Daily reported.

The Shenzhen-based company called in senior officials at the two chipmakers’ Chinese units to request a stable supply of the chips regardless of the US government's efforts, the report said.

Huawei is one of the five biggest clients for Samsung and SK Hynix, spending around 10 trillion won ($8.1 billion, or Dh29.75bn) to buy dynamic random access memory (Dram) and Nand flash memory chips from the Korean companies every year, the newspaper said.

The request came as pressure on Huawei's global suppliers rose after US President Donald Trump barred any chipmaker using American equipment from supplying the company without US government approval.

While memory chip makers are not subject to the US 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 per cent of the Dram chips globally, including them in any US action would threaten the survival of the Chinese company, the newspaper said. It cited an industry official it did not identify as saying that Huawei is quickly building its memory chip inventory in preparation for a worse scenario.

Updated: May 24, 2020 06:46 PM

SHARE

Editor's Picks
NEWSLETTERS
Sign up to:

* Please select one

Most Read