Japans Sony and Kioxia Holdings, a memory chipmaker have applied for US approval to continue the supply to Huawei. If the approval is given, the move will follow other tech companies like Intel Corp that lately received licenses from US authorities.
While the US China ties are at their worst, the US authorities are pushing governments worldwide to squeeze out Huawei, stating that the telecom giant would send data to the Chinese government for intelligence purposes.
Huawei is one of Sonys top customers for smartphone image sensors. Kioxia Holdings is the worlds second-biggest flash memory chipmaker and a supplier for Huawei. Reports state that Kioxia and Sony would face risk to their earnings without the U.S. licenses
Kioxia warned that the U.S. restrictions on Huawei might trigger oversupply of memory chips and lower prices. Lately, it suspended a plan for a multi-billion dollar listing as the tension in U.S. China ties impact the global chip market.
Due to a decrease in smartphone sales during the COVID-19 pandemic, in August, Sony witnessed a 45 Percent decline to 130 billion yen in the operating profit of the sensor segment for the year ending March 2021. However, the analysts believe that the image sensor earnings could witness further decline due to the escalating U.S. crackdown on Huawei.
The smartphone memory chip provides around 40 Percent of the Kioxias sales of which Huawei accounts for several percent of the total.
Intel is one of the few U.S. chipmakers that have received a license to supply components for personal computers to Huawei. But, the U.S. limitations of Huaweis access technology for telecommunication are anticipated to become tighter.
Japanese, South Korean, and Taiwanese companies collectively supply parts worth 2.8 trillion yen to Huawei yearly, estimates Omdia director, Akira Minamikawa.
Huawei Japans chairman, Jeff Wang stated that last year Huaweis acquisition from Japanese suppliers rose by over 50 Percent.
Source: https://gadgets.ndtv.com/mobiles/news/sony-kioxia-seeking-us-approval-to-supply-to-huawei-nikkei-2304888#:~:text=Japan's%20Sony%20and%20memory%20chipmaker,received%20licences%20from%20US%20authorities https://asia.nikkei.com/Spotlight/Huawei-crackdown/Sony-and-Kioxia-seek-US-approval-to-bypass-Huawei-ban