Samsung and LG will stop supplying display panels to Huawei

[realpetertdm]

Summary

Samsung and LG won't (can't) make displays for Huawei anymore.

 

Quotes

Quote

South Korean news outlet Chosun Biz reports that LG and Samsung have decided to suspend the supply of “premium” smartphone displays to Huawei. The suspension is said to go into effect from September 15.

Huawei has generally turned to LG and Samsung, along with China’s own BOE for its display needs. So removing LG and Samsung from the equation means that BOE will likely need to pick up the slack. However, Chosun Biz also adds that Huawei is testing displays from local companies like Visionox, Tianma, and CSOT.

-Android Authority

 

According to South Korean media SBS CNBC, this is because Panel DDIs (Display Driver IC) also fall under the new restrictions set in place by the US government.
Currently, Samsung Display and LG Display are supplying smartphone display panels to Huawei. Starting on September 15th, they will stop supplying display panels to Huawei. Huawei is reportedly looking to BOE, China Star (CSOT), Visionx and other Chinese suppliers to replace Samsung and LG.

However, it looks like this isn't going to impact the South Korean display industry too much. An industry insider explained that Samsung and LG Display's sales to Huawei are small compared to the semiconductor industry, and that losses won't impact the companies too much.

 

My thoughts

The restrictions set in place by the US government are expected to last after the election, so this is probably not a temporary measure. Considering that Samsung has massive market share in the smartphone OLED industry, its going to be hard for Huawei to find a replacement that can make enough displays for their phones. Huawei now has to rely on Chinese parts manufacturers, both with semiconductors and display panels. This isn't looking too good for Huawei, this is probably going to lead to less smartphone production on Huawei's end.

 

Sources

 https://www.androidauthority.com/huawei-display-supply-1156657/

https://www.yna.co.kr/view/AKR20200909112200003?input=1195m

https://biz.chosun.com/site/data/html_dir/2020/09/09/2020090901293.html?utm_source=naver&utm_medium=original&utm_campaign=biz

https://cnbc.sbs.co.kr/article/10000995857

https://www.hankyung.com/it/article/202009091663g

[Quinnell]

This looks to be related to the article posted earlier regarding NAND and RAM chips being blocked.  As I said there, this is going to really punch Huawei in the gut.  I am in agreement that this is likely not a temporary measure.  It looks like it's going to be long term.
 

 

[Donut417]

8 minutes ago, realpetertdm said:

US government are expected to last after the election,

Hard to say. Depending on who wins the restrictions could lessen or be removed. While Im sure the trade war will go on. There are several ways to skin a cat. New leadership might find a different direction to go. 

 

9 minutes ago, realpetertdm said:

Display Driver IC

Are theses like supplied by an American company? Last I checked both Samsung and LG are Korean companies. Unless the South Korea government is just jumping on the US hates China band wagon. In a way this sucks for China but is also good for China. They can make the parts themselves and create more jobs. The sucky part is having the know how to do so. If they have the skills then there shouldn't be an issue.

[williamcll]

Aren't there factories in China that make their own OLED already?

[realpetertdm]

1 hour ago, williamcll said:

Aren't there factories in China that make their own OLED already?

Yes, but in terms of smartphone OLEDs Samsung + LG makes up over 90%

[realpetertdm]

2 hours ago, Donut417 said:

Hard to say. Depending on who wins the restrictions could lessen or be removed. While Im sure the trade war will go on. There are several ways to skin a cat. New leadership might find a different direction to go. 

 

Are theses like supplied by an American company? Last I checked both Samsung and LG are Korean companies. Unless the South Korea government is just jumping on the US hates China band wagon. In a way this sucks for China but is also good for China. They can make the parts themselves and create more jobs. The sucky part is having the know how to do so. If they have the skills then there shouldn't be an issue.

The restrictions set in place by America isn't only applicable to American companies, AFAIK. I need to check to be sure, but what America is saying is that any company that uses american technology to manufacture semiconductors needs to get approval from the US government to sell to Huawei. Samsung and LG (and SK Hynix) don't want to go through the approval process, my assumption is that they did the calculations and decided it's not worth it to make the US angry to sell to Huawei.

[Bombastinator]

Might be too late for that one.  There are other companies that make panels internal to China. Could take a great big dump on Huawei for a few years maybe though while Chinese internal stuff learns how to make the right size panels. Part of it is going to be is the mainland chinese economy big enough to absorb the blow?  Will Chinese citizens put up with substandard equipment for long enough?  The Architects of that will need to look at the capacity of China.  The first tier cities are equal to anything in the world.  The second tier cities are close.  The third tier cities aren’t though, and below that is ox carts and wooden boats.  There are places in China that have never seen a motorcycle.  The vast majority of it even.  China hasn’t done well enough with their internal CPU stuff so far, so it’s not impossible it could work.  This “strangle chinese industry” thing is gonna be close and it might not succeed.  If it doesn’t the blowback could be ugly. 

[LAwLz]

Seems weird that the US can push and bully Korean companies and decide who they can and can't sell products to. 

[RejZoR]

In all honesty, I just wish this nonsense ends and the sooner it happens, the better. Huawei may be Chinese spy, but they also made some stupendously good phones, forcing everyone else to try harder. Now there is none of that.