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Supply permit

Samsung Display, Asia's first to win Huawei supply permit

Oct 27, 2020 (Gmt+09:00)

Samsung Display Co., a leading South Korean display panel maker, has received a permit from the US to supply certain panels to Huawei Technologies Co. despite Washington’s sanctions against the Chinese tech giant.

The US Department of Commerce has given Samsung the green light to supply its organic light-emitting diode (OLED) panels for Huawei’s smartphones, making it the first company in Asia to receive such approval to continue doing business with the Chinese firm, according to sources on Oct. 27.

The US government imposed restrictions on the Chinese smartphone maker on Sept. 15, citing national security concerns. The sanctions prohibit companies from supplying Huawei with components made with US equipment, software and design without prior consent from Washington.

Samsung Display, Asia's first to win Huawei supply permit

The crackdown has cut Huawei off from its major chip and component suppliers, including Taiwan Semiconductor Manufacturing Co. (TSMC) and a number of South Korean companies.

Samsung Display’s crosstown rival LG Display Co. and Korea’s two leading chipmakers, Samsung Electronics Co. and SK Hynix Inc., haven’t received such approval from the US yet.

Intel Corp. and Advanced Micro Devices Inc. (AMD) reportedly obtained licenses from the US government to supply Huawei with their computer and server processors last month.

KEY DISPLAY PANEL CUSTOMER

Huawei is a key customer of Samsung Display.

The Korean display maker exports 10% of its OLED panels for smartphones worth about 2 trillion won ($1.78 billion) a year to the Chinese firm.

Samsung Display, Asia's first to win Huawei supply permit

Sources said the US may have granted the license to Samsung Display as display panels are classified as less sensitive than semiconductors. But it’s uncertain if Huawei will resume display purchases from Samsung Display.

“With chip supplies to Huawei still under restrictions, it’s uncertain if the Chinese company will procure panels in large volume to make smartphones,” said a panel industry official.

According to market researcher Strategy Analytics, Huawei’s global smartphone market share is forecast to decline to 4.3% in 2021 from 15.1% this year.

Write to Hyung-Suk Song at click@hankyung.com

In-Soo Nam edited this article.

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