SEOUL, May 21 (Korea Bizwire) — South Korean companies are concerned over possible collateral damage as the U.S. government is putting heavy pressure on Huawei Technologies Co., a Chinese electronics manufacturer.
While South Korean IT firms are not expecting any immediate impact, they are keeping a close watch on the trade war between the U.S. and China which has been destabilizing the IT market.
Samsung Electronics Co., SK hynix Inc., and other local electronics manufacturers supply semiconductors for servers, computers, and mobile phones to Huawei, but they account for only a minimal portion of total sales.
“Huawei accounts for less than 5 percent of total sales of semiconductors for Samsung Electronics and SK hynix,” said a source familiar with the market.
“The U.S. Department of Commerce still requires 150 days of drawing up plans before it imposes sanctions on Huawei, so we are not expecting any immediate impact.”
Samsung Electro-Mechanics Co., LG Innotek Co., and other smartphone parts manufacturers in South Korea also supply parts to Huawei, but the company accounts for a small portion of total sales.
Huawei has primarily been using parts from China or Japan, so experts argue that South Korean parts manufacturers are outside the scope of collateral damage.
Samsung Display Co., which has a de facto monopoly in the global market for smartphone display panels, also supplies panels to Huawei.
The damage is expected to be minimal, however, since Huawei does not sell smartphones in the United States.
South Korean IT firms are nevertheless on the lookout for future problems if U.S. pressure on Huawei leads to escalation in the U.S.-China trade war.
“If the United States and China continue with the head-on dispute, it is inevitable that South Korean IT companies will be impacted,” said one expert. “For now, all we can do is to devise plans for future scenarios.”
Kevin Lee (email@example.com)