The U.S. government tightened restrictions on the export of semiconductors to Huawei.

In the middle of this month, causing Japanese companies to suspend shipments, among other effects.


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The U.S. government tightened restrictions on the export of semiconductors to Huawei. 1

The U.S. government tightened restrictions on the export of semiconductors to Chinese telecom equipment giant Huawei Technologies Co. in the middle of this month, causing Japanese companies to suspend shipments, among other effects. Huawei, which has become the world’s top smartphone producer, is an important trading partner for Japanese parts and materials manufacturers and this could cause a loss of commercial opportunities.

In May, the U.S. government banned the shipment of semiconductors produced using U.S. manufacturing equipment and software to Huawei. The ban initially only covered semiconductors designed by Huawei, but was extended in August to include general-purpose semiconductors that were not designed by Huawei. The grace period for these regulations has expired, and since Sept. 15, the ban has effectively stopped shipments from foreign manufacturers of chips made with U.S. technology.

A series of Japanese manufacturers have also halted shipments to Huawei because of the extensive use of U.S. equipment and software used in making semiconductors. Mitsubishi Electric Corp. and Renesas Electronics Corp. have canceled shipments of chips used in base stations for 5G, a high-speed, high-capacity telecommunications standard.

Toshiba Corp. stopped shipments of not only semiconductors, but also hard disk drives (HDDs). Sony Corp., which excels in a type of semiconductor called image sensors, holds half of the global market share for smartphones and is also used by Huawei.

According to U.S. research firm IDC, Huawei became the first company to overtake South Korea’s Samsung Electronics Co. in terms of smartphone shipments in the April-June period. The company’s procurements from Japanese companies, which are strong in smartphone parts and materials, have been growing rapidly to reach about ¥1.1 trillion in 2019, 1.5 times higher than the previous year. In a speech in Tokyo last November, Huawei board of directors Chairman Liang Hua said, “Japanese companies and Huawei have a mutually complementary relationship.”

If Huawei’s smartphone business is hit by the U.S. government’s tightening of regulations, Japanese firms’ orders will also decrease. Taiwanese research firm TrendForce predicts that Huawei’s smartphone shipments in 2021 will be 30-50 million units, about 20% of 2020’s total.

Meanwhile, Huawei is also one of the leading manufacturers of mobile phone base stations, including 5G, in terms of global market share. If it is unable to procure the semiconductors it needs, this could create room for competitors Fujitsu Ltd. and NEC Corp. to increase their market share


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