The deadline of September 15 now seems to be getting depressing for Huawei. The company’s supply line will be reduced once the US restrictions become effective. It is expected that Samsung and LG will stop deliveries to the smartphone company due to tightened US trade restrictions.
Huawei will not receive deliveries from Samsung, LG, and SK Hynix
It is reported that the chips used to handle the screens are affected by US sanctions, which is the reason for the suspension of shipments. Chosun Biz, who broke the news, quoted industry sources as saying that Huawei is not responsible for a large part of the shipments from both display manufacturers.
However, the two Korean companies are important suppliers of Huawei’s main product line. The company has managed to diversify and will source all BOE Huawei Mate 40 displays. However, the Mate 40 Pro will use a mixture of BOE, Samsung, and LG screens.
However, while laboratories in China cannot yet manufacture 7nm and 5nm chips for use in future flagships, a steady supply of displays should be easier to secure locally. The BOE can increase production, and if not, CSOT and Visionox are also working on OLED cell displays.
LG Display claims that this will have minimal impact on its sales and that it will diversify its customers in the future. Samsung Display has not commented on the situation.
The other protagonist involved is Sk Hynix. It is estimated that 41.2% of SK Hynix’s revenues in 2020 came from China, with the bulk of this coming from storage for Huawei smartphones and tablets. Without Huawei as a customer, this would mean significantly less revenue for Hynix.