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    Samsung might become Huawei’s lifeline in regards to memory chips

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    Last updated: May 25th, 2020 at 14:15 UTC+02:00

    A couple of weeks ago, we explained how Huawei's ban in the USA might represent a golden opportunity for Samsung. And although the latter company's smartphone business could benefit from Huawei's unfavorable position, the same might also be true for Samsung's semiconductor business. According to a recent report, Huawei is looking to stock up on memory chips and has recently contacted Samsung and SK Hynix for a stable memory chip supply.

    The Trump administration barred chip makers using US technologies from supplying Huawei without Washington's approval. Although this restriction doesn't apply to memory chip manufacturers, Huawei is reportedly fearing that the US government will eventually extend its restrictions to include memory chips as well.

    Huawei wants to build a memory chip inventory, Samsung could benefit

    The Korean media reports that Huawei is now preparing for the worst and intends on building a large inventory of memory chips as a safety net. To this end, Huawei senior executives got in touch with Samsung and SK Hynix to strike an agreement for a stable supply of memory chips, according to a report citing anonymous industry sources. However, representatives from Samsung have denied this report earlier today, claiming that this type of meeting did not take place.

    If Samsung will help Huawei to build a memory chip inventory, it will be in the Korean giant's benefit, as this will likely improve the company's DRAM and NAND market share while boosting revenues. On the other hand, assuming that the restrictions set in place by the US government will eventually extend to memory chips, Samsung will probably not risk losing its favorable position in the DRAM market for a deal with Huawei. Therefore, such restrictions will hurt not only Huawei, but also Samsung, especially given that the Chinese tech company is one of its biggest clients in the DRAM segment.

    BusinessGeneral HuaweiSamsung Semiconductor
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