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Samsung Display wins US license to supply panels to Huawei

Written by Nikkei Asia Published on 

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Company is first in Asia to receive permit as chip suppliers are left waiting.

South Korea’s Samsung Display has received a license from the US government to supply its panels to Huawei Technologies, making it the first company in Asia known to have been given the green light to continue doing business with the Chinese tech giant, an industry source familiar with the matter said Tuesday.

“Samsung Display received approval to supply some of its products to Huawei,” said the source, who has direct knowledge of the matter but asked not to be named.

Huawei is a key customer of both Samsung Display and its parent Samsung Electronics. Samsung Display, for its part, is a vital supplier for Huawei, as it has provided organic light-emitting diode, or OLED, panels for the Chinese company’s premium smartphones.

The latest US crackdown on Huawei, however, means that global suppliers must receive a special license if they use American technology or software to supply the Chinese smartphone maker. The new rule, which went into full effect on Sept. 15, has cut Huawei off from its most important chip and component suppliers, including Taiwan Semiconductor Manufacturing Co. and a number of South Korean companies.

Read more: Huawei’s new Kirin-powered Mate 40 line receives warm welcome in China

China digest

The source said it is not clear yet if Huawei will be able to use Samsung Display’s panels to produce its smartphones because suppliers that provide memory and application processor chips for the phones have not yet obtained the requisite licenses.

“Samsung Electronics and SK Hynix have not gotten approval from the US for the sale of chips to Huawei. So, it is uncertain whether Huawei can produce its smartphones with just the panel supplies,” the source said.

SK Hynix confirmed to Nikkei Asia that it has not yet received a license, while Samsung Electronics declined to comment.

Samsung Display is not the first company granted a license by the US Last month, Intel and AMD said they have received “some” licenses to provide chips for Huawei’s PCs and servers but declined to say which specific products are covered by the licenses.

Huawei last week released its latest premium smartphone range, the 5G-capable Mate 40 series. While the new phones boast cutting-edge technology on par with that of Apple’s own 5G iPhones, Huawei has acknowledged that it is still trying to find alternative sources for key chips. Industry experts say the Mate 40 range will likely see strong demand, but warned that the US crackdown could lead to issues on the supply side.

This article first appeared on Nikkei Asia. It’s republished here as part of 36Kr’s ongoing partnership with Nikkei.

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