Samsung Electronics and SK Hynix will halt their memory supply to Huawei from September 15, as US sanctions that were announced in May against the Chinese tech giant are set to come into effect.
The May sanctions ban Huawei from being able to access core components, such as memory, that are designed and produced with US technologies.
After announcing these sanctions, the US in August enforced further restrictions and added 38 Huawei affiliates to its Entity List of companies that are considered as risks to national security or foreign policy interests. Huawei itself, along with hundreds of its affiliates, were added to the list last year.
The August announcement expanded restrictions on Huawei to not allow the Chinese tech giant to obtain foreign-made chips produced from US software and technology.
There was initially some confusion from Samsung and SK Hynix on whether the May sanctions affected their ability to supply memory to Huawei, two people familiar with the matter said. The August announcement, however, made it clear that Samsung and SK Hynix's memory supply would be banned as part of the sanctions.
At the moment, it seems highly unlikely that the US will give the South Korean companies license to supply to Huawei, they added, with the pair very much expecting for supplies to halt from September 15.
Samsung and SK Hynix declined to comment on the matter.
Samsung, the world's largest memory semiconductor maker, is expecting the impact of the halt to be minimal as Huawei is just one among many of its clients, the two sources said. The company supplies its memory chips to Apple and other major Chinese smartphone makers.
SK Hynix, on the other hand, is expecting its sales to be impacted heftily from the halt, they said.
Other companies in Asia that are part of Huawei's supply chain are also expecting to end their dealings with the embattled Chinese company. Chip-making giant Taiwan Semiconductor Manufacturing Co (TSMC) confirmed in July that it had suspended new orders from Huawei and is expected to halt Huawei's supplies this month.
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