As a result of deepening sanctions against a major focus, after the tariffs that began as economic became embattled.
What began with a claim of unfair trade practices has led to a protracted trade conflict between the United States and China. Huawei hasn't been the only victim of the political heat as some companies have been singled out even over alleged infractions. Accusations have centered around claims of data privacy violation and of working with the Chinese government as the recipient of data. As news continues to come through on the subject, Huawei may be suffering an indefinite split from what has been a consistent partner in the market.
As reported by Huawei to an end, as the supply of semiconductors to the Chinese company is scheduled to halt on September 15. The move by Samsung, and the semiconductor company SK Hynix, has been forced by the U.S. Department of Commerce. The sanctions supposedly lacked clarity in their exact wording, fueling expectations that the semiconductors won't be the only hardware supply being put to a stop. The government sanctions prohibit these hardware sales to "38 Huawei s in 21 countries."
The Effect Of A Samsung & Huawei 'No Deal' On The Market
As U.S. software and patents were also prohibited for use in semiconductor manufacturing, the same source reports how it is "virtually impossible" to continue production in the same way. In the last year, Huawei bought $20.8 billion worth of semiconductors, making the company a significant market player. If those sales are no longer possible, as a result of sanctions, it's suspected to impact DRAM memory prices and could even have negative consequences for the industry. As it stands, Huawei has a surplus of semiconductors obtained during the early stages of the trade war, and it is suggested that the stock could last the company up to two years.
While Samsung will probably continue to operate just fine, being outside the cross-hairs of the sustained disputes on trade, the consequences could be of major importance for Huawei in the long run, considering it has been shut out of some of the technical infrastructure necessary for the manufacturing of a basic hardware component. To what length the market will be exactly affected isn't as clear, but points to trouble for the regional tech industry. What's worse from an economic perspective, is that no end to the trade war is yet in sight, and how this will impact market actors beyond Huawei, with no bearing on the disputes at all, is a mystery.
Source: ChosunBiz