SEOUL, Sept. 15 (Yonhap) – South Korea’s memory chip exports to China are at risk of being hit hard by US sanctions against Chinese telecoms giant Huawei Technologies Co. for its heavy reliance on it -with respect to the neighboring country, sources have provided this Tuesday.
New sanctions preventing the sale to Huawei of semiconductors manufactured or designed using U.S. equipment or software without Washington’s prior approval took effect today.
This US measure forced Samsung Electronics Co., the world’s leading memory chip maker, and SK hynix Inc., to stop shipping semiconductors to the Chinese company.
Huawei is one of Samsung’s top five customers. SK hynix’s dependence on the Chinese company is estimated to be 10% in terms of sales.
Industry sources noted that sanctions against Huawei would likely affect South Korea’s semiconductor exports to China given their heavy reliance on the world’s second-largest economy.
According to data from the Korea International Trade Association (KITA), China accounted for about 41% of South Korea’s memory chip exports during the January-July period.
The amount of overseas shipments of memory chips from South Korea reached $ 54.74 billion for the first seven months of the year, of which $ 22.49 billion relates to China. Hong Kong is just behind with an amount of $ 11.38 billion or a 20.8% share.
Over the same period, South Korean exports of flat panel displays and sensors to China amounted to $ 3.82 billion, or 43.7 percent of total shipments of these products. Vietnam came first with 44.5%.
Observers have noted that South Korean memory chip makers could face a shortfall of 10,000 billion won ($ 8.45 billion) if US sanctions remain in place for a year.
The estimated amount of the loss represents about a 10th of South Korea’s total semiconductor exports in 2019 which amounted to $ 93.93 billion.