US sanctions against Huawei to lose $ 10.4 billion in revenue to Japanese suppliers

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Last updated on May 1st, 2023 at 08:26 pm

US sanctions against Huawei to lose $ 10.4 billion in revenue to Japanese suppliers

Japanese companies, Omdia estimates, supplied Huawei with $ 10.4 billion worth of components last year, so the loss of contracts with the Chinese giant due to US sanctions will be a serious test for them. Some suppliers will try to obtain a license to continue cooperation with Huawei, while others will reorient to other customers or new sales markets.

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Sony actively supplied Huawei with image sensors for smartphone cameras, but in light of the supply ban, it was forced to revise its investment program. As a result, the number of capital expenditures planned for this year by Sony was reduced by $ 470 million. The annual revenue of Sony from the sale of sensors for the needs of Huawei was measured in billions of dollars, so the company will try to compensate for the shortfall in revenue in several ways.

First, Sony plans to apply for a license to maintain the ability to do business with Huawei. As the initiative is not guaranteed to succeed, it is contemplating supplying its products to Apple and Chinese smartphone makers, which will take Huawei’s place in the market. Finally, the Japanese manufacturer can be helped by diversifying its sales markets: it can move away from the smartphone segment by supplying optical sensors for the industrial automation and automotive electronics sectors.

Renesas Electronics was forced to stop supplying components for Huawei base stations, and now the Japanese manufacturer is forging contacts with European competitors of the Chinese telecommunications giant. Kioxia has stopped supplying its solid-state memory to Huawei and is now targeting other brands of smartphones and server hardware. Toshiba has suspended the supply of electronic components and hard drives to Huawei, just in case, pending clarification of the impact of US sanctions on this type of activity.

The sanctions against Huawei have had a significant impact on the RAM market. Instant prices are up 7% since the beginning of the month, but experts believe they were fueled by purchases from Huawei. Since the memory shipments from this company will be discontinued from mid-September, prices should come down soon.

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