Huawei, a company that symbolizes China's '5G leap forward', has been banned from buying new semiconductor components from today (15th) due to US government sanctions.
According to an announcement from the U.S. Department of Commerce released last month, starting on the 15th local time, all semiconductor companies around the world that have partially utilized U.S. technology must obtain prior approval from the U.S. Department of Commerce to sell their products to Huawei.
It is predominantly that the industry sees that Huawei's semiconductor purchase is almost impossible due to the uncertainty of the possibility of approval by the US government.
From application processors, which are the brains of smartphones, to modem chips for communication, memory such as DRAM and NAND, all of Huawei's major products contain semiconductor components.
Therefore, Huawei will have no choice but to run a business on the premise that it cannot additionally procure semiconductor parts necessary to make various products such as mobile communication base stations, smartphones, computers, and TVs.
U.S. government sanctions against Huawei have been on the rise since last May.
The United States first banned domestic companies from doing business with Huawei in May last year.
Because of this, Huawei was unable to buy semiconductor components from US companies such as Qualcomm.
Also, as Google's Android operating system was not officially available, it was hit hard in overseas smartphone markets such as Europe.
Subsequently, in May, the'bypass' in which Huawei's own designed semiconductor chip was entrusted to Taiwan's TSMC to produce was blocked, and virtually all semiconductor purchases in the world were blocked from that day.
Huawei plans to endure with stocked parts as much as possible until the US government's sanctions issue is resolved.
However, the industry sees that there is a possibility that Huawei will no longer be able to create new products as some parts inventory will drop as early as next year.
Huawei is expected to be at a crossroads of existence if the current unprecedented high-intensity sanctions continue after the US presidential election in November.
There are also observations that Huawei is likely to bring about a major change in the global telecommunications equipment and smartphone market, where Huawei is leading the way.
In addition, Huawei's sanctions are expected to have a significant impact on the business of several global partners, including Samsung Electronics and SK Hynix in Korea.
Wei Wang, a Chinese technology media outlet, cited data from UK market research firm Omdia yesterday. He also said that it would reach 35 trillion won.