In a move that looks like it may benefit the Korean smartphone maker, Samsung may cease trade with competitor Huawei thanks to ever-stricter trade restrictions. The Trump administration has tightened the leashes on all global companies that utilise American tech to produce components, making it harder than ever to trade with the Chinese tech giant.
Under pressure
According to a new report by a South Korean publication, Samsung and a company called SK Hynix will stop selling components to Huawei. Increased pressures from the US has led to this, and it’s becoming clear how vast the US’s foothold in the global tech industry really is. The Trump administration is trying its best to cripple Huawei and its suppliers.
“According to Chosun Ilbo and other Korean news outlets, the companies will suspend trade on September 15th, the day a new set of rules limits dealing with Huawei,” The Verge reports.
We know what you’re thinking. Why would Samsung supply its biggest competitor, and with what? Well, Samsung is one of the biggest suppliers in the world when it comes to displays, flash memory chips and even, in some cases, RAM. It makes sense to sell to the biggest smartphone manufacturer in the world (i.e. Huawei).
Even though Samsung may gain more global smartphone sales from crippling Huawei, it’ll lose one of its biggest clients in terms of component sales. It’s stuck between a hard place and a Trump card, possibly feeling the effects on its bottom line — and that’s with an uptick in smartphone sales.
The first of these sanctions, prohibiting companies using US tech from trading with Huawei, no matter where they’re based, was implemented in August, after which Huawei lost its Kirin chip manufacturer as a supplier too. At this point, it’ll have to move production of every single component in-house, which will prove costly.
It’s really sad to see the global tech industry turn a giant player that has managed to show growth in a time of great turmoil. Good luck, Huawei. May the force (and the chips) be with you.
