Samsung and LG now display and chip to Huawei

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The sanctions imposed by the United States government on the Chinese manufacturer Huawei have already brought several market consequences for the company, such as the end of the licensing of the Android ecosystem and the need to manufacture the chips themselves without American partners.

However, it seems that the problems generated by this trade war are increasingly beyond both countries and could harm other important sectors of the company. The first blow comes to the processor market: according to South Korean websites, Samsung and SK Hynix will end the supply of components to Huawei later this month.

As The Verge reports, the move is a major blow to the manufacturing process for Kirin processors, which are owned by Huawei, but depended on the production of other companies. The contract with Taiwanese giant TSMC was cut in May 2020 also because of sanctions and, for now, it depends on local operations and may have inventory problems. Brands like Qualcomm and MediaTek are trying to get authorization from the U.S. government to negotiate with the Chinese, but have not yet been successful.

Screens

Another supply problem involving Huawei and former partnerships is in the field of displays. According to the Android Authority website, the Samsung and LG screen divisions are also expected to end partnerships with the Chinese company because of the sanctions in September this year.

The alliance with the two South Koreans involved sending “premium” screens to smartphones, which probably means the panels used in the company’s most powerful models. As an alternative, Huawei should intensify contracts with the Chinese BOE, which already provided partial screens for some segments.

Recently, the company overtook Samsung and became the leader in the global cell phone market, but the job could be threatened if it has problems maintaining inventory and making new models.


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