Japan’s Sony joins South Korea’s Samsung in seeking a license from the US Department of Commerce to sell components to Huawei, one of the world’s largest manufacturers of smartphones and communications infrastructure.
Sony faces without the approval of the Commerce Department a risk to its profits, and until yesterday Saturday there was no indication of US approval.
The Japanese company provides components for products such as 5G devices that have become caught in the high-tech race between the United States and China.
Sony ranks as one of the largest providers in the world by market share for mobile image sensors.
It is estimated that Huawei accounts for a fifth of the Japanese company’s sales of about $ 9.5 billion from image sensors, making it the second largest buyer after Apple.
In August, Sony expected a 45 percent decline in operating profit for the sensor segment for the year ending March 2021.
The company attributed this decline mainly to a drop in smartphone sales during the Coronavirus pandemic, but analysts say: The image sensor profit forecast may see further cuts as a result of the escalating US campaign against Huawei.
Japanese memory chip maker Kioxia has applied for US approval to supply components to Huawei.
(Kioxia), a subsidiary of Toshiba, is also affected by the sanctions imposed on Huawei, and smart phone memory chips provide about 40 percent of the company’s sales.
Tensions between the United States and China were a factor in Kioxia’s recent decision to delay the initial public offering on the Tokyo Stock Exchange, which was scheduled for October 6.
And the US chip maker Intel has obtained a license to supply components to Huawei for personal computers.
The US restrictions are expected to become tougher on Huawei’s access to communications technology.
Japanese, Taiwanese and South Korean companies supply parts worth $ 26.4 billion to Huawei annually.
“Huawei’s purchases from Japanese suppliers have grown by more than 50 percent over the past year, due to the important role of Japan in global supply chains,” said Jeff Wang, Chairman of the Board of Directors of Huawei Japan.
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