Diplomatic unrest between the US and China is bringing yet another bad news for Huawei. The Chinese smartphone manufacturer has been facing unrest for a while now. It began when Huwaei was placed on the US Commerce Department’s Entity List.
The trade restrictions on Huawei began last year. There were allegations that it was selling user data to the Chinese government. Huawei has denied all claims, repeatedly.
The latest blow to Huawei comes from Samsung and LG Display. These manufacturers are expected to stop supplying panels for Huawei.
Being on the Entity List has already brought tighter restrictions on Huawei’s sales. Companies are barred from selling their products and services to Huawei. And now, the restriction against Huawei is getting even tighter. The US Administration has announced a new license requirement. This requirement is for all parties who wish to conduct business with Huawei.
According to the new restriction, companies need to apply for a new license. The companies that do not have the required license need to stop their business with Huwaei. Samsung Display and LG Display are not applying for the new license.
Reports by Chosun Biz imply that the display makers will no longer be supplying screens. The South Korean publication first reported the news on Wednesday. The decision to stop the supply came as Huawei only makes up a minor part of their businesses as opposed to Apple.
Reuters reported that Samsung has declined to comment on the situation. Samsung Display has been supplying screens for Samsung Electronics and Apple. However, LG has given a statement suggesting that the ban will only cause minimal impact. LG Display said that the panels that it supplies to Huawei are only of a limited number. LG added that it would continue to diversify its customer base.
Amongst others, Huawei P30 Pro and P40 Pro are some devices that featured display panels from LG. The screens on the devices were acknowledged by many.
The new restriction will take effect on September 15. Back in August, the US banned suppliers from selling chips made in the US to Huawei without a special license. TSMC has since stopped making the Kirin mobile processors for Huawei.
It is reported that MediaTek has applied from the new license. If approved, MediaTek will get permission to continue its business with Huawei. Maybe, if all goes right, Huawei devices will probably feature chips from MediaTek.
Huwaei also has pre-existing alternatives for displays. A majority of displays on Huawei come from Chinese manufacturers like BOE and CSOT. Many OLED screens on Huawei are from its Chinese partners. However, it will be a high-end task for the company to find manufacturers for other internals.
It will be interesting to see how Huawei tackles this new trade challenge.