Samsung Display gets US license to supply its panels to Huawei, but it has one more hurdle to clear

South Korea’s Samsung Display has acquired a license from the US government to supply some of its panels to Huawei. An industry source told Nikkei Asia that Samsung Display is the first company in Asia known to have been given the greenlight to continue doing business with the Chinese tech giant.

Huawei was cut off from two of its display suppliers: Samsung Display and LG Display on 15 September following stricter US trade restrictions. This follows the worsening US-China relations with Washington accusing Huawei of spying for the Chinese Communist Party. However, these allegations remain unsubstantiated.  

The latest round of US restrictions have cut the Chinese tech giant off from its chip and component suppliers including Taiwan Semiconductor Manufacturing Co (TSMC). This has prevented Huawei from producing its high-end Kirin chips that are used in many of its premium devices. The recently debuted Mate 40 series could be Huawei’s last Kirin-powered flagship device.

The South Korean display supplier, together with its parent company Samsung Electronics, counts Huawei as one of its major customers for its organic light-emitting diode (OLED) panels. Samsung’s panels are normally used in Huawei’s top flagship models like the P40 Pro+.

But Huawei is not out of the woods yet because it is still not clear if the company will be able to use Samsung Display’s panels to produce its future smartphones. This is because other firms in the supply chain that provide memory and application process chips for the phones also need to get US licences.

For the time being, Huawei will have to continue sourcing panels from BOE, a Chinese display maker, which supplied the screens used on the P40 Pro.

A number of other suppliers including Samsung Electronics, SK Hynix and Qualcomm, are still applying for licences to trade with Huawei. None have received a license approval from the US.

Conversely, last month both Intel and AMD received approval from the US authorities to provide chips for Huawei’s PCs and servers. This is good news as Huawei’s PC business continues to be a bright spot for the company. Huawei claimed its notebook market share reached 16.9% making its second place in China.

Though US sanctions imposed on the company had hampered Huawei’s business outside of China, but it had grown to dominate its massive home market. It overtook Samsung to become the world’s largest smartphone vendor in Q2 2020, based on the latest data from industry tracker Canalys.

[SOURCE]

Related reading