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

A billboard (top) featuring a commercial for Chinese telecom brand Huawei displaying their new 5G smartphones is seen as people passes by on a street in Beijing on May 22, 2020.  / AFP / NICOLAS ASFOURI
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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.