Huawei calls on Korean chipmakers to continue their parts supply
South Korean companies are finding themselves stuck in the middle of the trade war between the U.S. and China... after the Trump Administration decided to blacklist China's Huawei.
China wants Korean companies to keep selling it their components.
Kim Hyesung reports.
Huawei is calling on Korean companies to continue supplying it with parts.
According to business sources, executives from Huawei met with officials from Samsung Electronics, SK Hynix, LG Display and others last Thursday and Friday, calling on them to continue their supply of major parts and components.
The move comes after the Trump Administration put Huawei on a trade blacklist over security concerns and has called on its allies, including Korea, to join in restricting business with Huawei.
U.S. chipmakers like Intel and Qualcomm announced that they will stop selling critical software and components to Huawei until further notice, which is set to hurt its supply chain.
Korean companies including Samsung Electronics and LG Display supplied more than 10 billion U.S. dollars of components to Huawei last year.
That's about six percent of Korea's total exports to China.
Both Samsung Electronics and SK Hynix export DRAM and Nand flash, which are used for Huawei smartphones and computers. Samsung Display and LG Display supply smartphone displays like OLED panels.
There are growing fears that Korea is caught in the middle of this U.S.-China trade war, putting it in a tricky position.
"This sales ban and pressure is similar to the THAAD dispute, where several Korean companies were pretty much forced to stop business in China with people boycotting Korean products. But the tech field is even worse. Korean IT companies have made long-term investments in China, including chips and batteries, they are intermediary goods, not just final consumer goods. They can't just stop everything all of a sudden."
The Korean government has repeatedly said that the decision to do business with Huawei should be a strategic one made by businesses.
As for companies, Korean tech giants said they will monitor the situation closely rather than changing their current business relationship with Huawei.