Strict US sanctions against Huawei have been in force since 15 September, and companies around the world are being forced to take a side. We have already seen the world’s largest foundry, TSMC, say that it will no longer do business with Huawei, even though Huawei was crowned the world’s largest smartphone manufacturer. According to a report by Korean site Chosun Ilbo, the next companies to drop out are Samsung, LG and SK Hynix.
First, Chosun Ilbo reports that both Samsung Electronics and SK Hynix have stated that they will stop selling chips to Huawei. Samsung is the world’s No. 1 memory manufacturer, and SK Hynix is No. 2, so Huawei will have to source NAND flash and DRAM memory from elsewhere. The No.3 memory maker is the American company Micron, which has already shaken Huawei. In the RAM market, Samsung, SK Hynix, and Micron are the “big three” manufacturers and the combined have about 94 percent market share. All three are major players in the NAND flash-memory market, which, according to Statista, goes to Samsung (35.5 percent), Keoxia (18.7 percent, formerly Toshiba Memory), Western Digital (14.7 percent), Micron (11.5 percent). is. Intel (9.7 percent), and SK Hynix (9.6 percent). Manufacturers, covering 99.5 percent of the market, all reside in the United States, Japan, or South Korea, so none are likely to sell to Huawei. Things are looking grim.
Chosun Ilbo states that Huawei is the world’s third largest buyer of semiconductors, and Samsung Electronics accounts for 6 percent of semiconductor sales and 15 percent of SK Hynix sales. Huawei knows that the ban has been around for a long time, and the report states that the company has “two years of inventory.”
Report # 2 states that both Samsung Display and LG Display have suspended Huawei. Samsung makes the best OLED display for smartphones, and no matter what the name outside the phone says, most flagship smartphones are using Samsung Display. There are plenty of ways to close the display market, but the most relevant is the OLED smartphone market, where, according to Pulse’s Q4 2019 numbers, Samsung had an 81.2-percent market share and LG had a 10.8-percent share.
Huawei’s best bet for performance is the Chinese company BOE, which ranked No. 3 on the list with 1.6 percent market share. Huawei regularly uses the BOE display on some devices, most famously as a supplier to the Huawei Mate X, although flagships such as the P40 Pro + still used a Samsung display. BOE is the largest overall display manufacturer, but has no foothold in the OLED smartphone market.
A chip stockpile and alternative Chinese suppliers may keep Huawei running for a while, but the company’s immediate problem is software, where it is barred from using the Play Store and Google’s Android app. Tomorrow, Huawei is expected to show progress on its Android rival “Harmony OS”, which was announced last year. It is still probably not ready to fight Android, but in the long run the company hopes the project will succeed where Tizen, Windows Phone, BlackBerry 10, Sailfish OS, Ubuntu Touch, Firefox OS, Symbian, MeeGo, and WebOS fail Have become.