Huawei’s Interesting Deal With Samsung Might Solve its Semiconductor Challenges: Report

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  • USA has mandated firms to apply for licenses for delivering semiconductor chips to Chinese companies
  • Samsung might prove to be Huawei’s savior but for a cost

Samsung Electronics might start delivering semiconductor chips to China-based Huawei soon. The latter, however, might have to cede a part of its share in the smartphone market.

A report posted in the Asia Times points out that South Korea has termed restrictions on companies supplying semiconductor chips to China-based firms as not acceptable. The country is also trying to mediate between China and the USA.

Samsung chips for Huawei’s business

Now the two companies might finalise a deal where Samsung would ensure chips supply to Huawei. It is to be noted here that Samsung has already set up a 7nm and a 5nm manufacturing facility. Interestingly, only Samsung and Taiwan Semiconductor Manufacturing Company can make 7nm chips at the moment.

TSMC, which was a large supplier of chips to Huawei, might soon stop its business deals with Huawei due to recent bans imposed by the US. As a matter of fact, TSMC, is also keen on setting up a semiconductor fab in the US.

It is to be noted here that the U.S. Commerce Department had announced some new mandates recently. These mandates require all non-US chip makers using America-made equipment, intellectual property or design software to apply for a license before shipping any chips to Huawei.

Interestingly, Huawei is among the top five customers of TSMC. In fact, most of Huawei’s flagship smartphones come powered by chips manufactured at TSMC’s facilities.

China-headquartered Huawei had sought assurances over sustainable semiconductor chips supply from Samsung and SK Hynix in the last week of May.

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