The #Trump Administration after escalating its sanctions against Huawei Technologies- restricting the Chinese telecommunications giant from foreign-made chips- has posed new challenges for suppliers in Japan, South Korea, and Taiwan.
According to the new rules, any non-U.S. company is restricted from selling chips made using U.S. technologies to Huawei without any special license.
As the rules starve Huawei of components, it represents an existential threat for Japanese, Taiwanese, and South Korean companies; the ripples of the decision felt everywhere. As per the estimates by a director at U.K. research firm Omdia, Akira Minamikawa, companies from #Taiwan, #SouthKorea, and #Japan collectively supply over $26.4 billion worth of parts to Huawei; the crackdown would most definitely curtail the production and upgrades from these companies.
Supplying over 30% of Huawei’s components, Japanese companies would bear the brunt of the situation the most; some similar fate for Taiwan Semiconductor Manufacturing Co, the world’s largest chipmaker.
Beyond affecting #Huawei and its American suppliers, U.S. agencies are determining if chipmaker Semiconductor Manufacturing International Corp. (SMIC) should be added to the Commerce Department’s “entity list”. Largely dependent on U.S. equipment and software, SMIC would suffer damage with the disruption.