Following the upgrade of the US government to Huawei, the share prices of Asian chipmakers fell, with MediaTek falling further. On Monday, US Secretary of State Mike Pompeo said in a statement that the US Department of Commerce had tightened restrictions on Huawei’s access to US technology. In addition, the US included Huawei’s 38 subsidiaries in 21 countries in the “list of entities”. This means that all chip companies working for Huawei, no matter where they are located, if they use US software or equipment will be affected.
According to Pompeo, the State Department strongly supports the Commerce Department extending its foreign direct product rules to prevent Huawei from using “alternative chip production” and to provide finished products made with US-made tools. States… »
After the report hit the public sector, MediaTek’s share price fell 9.93% on Tuesday. The share of Taiwan chipmaker scored a new 54% after its “neutral” rating by Credit Suisse. Shares of Novatek and Realtek Semiconductor also fell more than 6%. These companies are all alternative routes for Huawei.
In addition, shares of smartphone vendors Sunny Options, AAC Technology Holdings and BYD Electronics International have also fallen.
In May of this year, the US Department of Commerce banned all chip sales to Huawei. This law only works if the chip uses US technology. According to confidential information, Huawei will run out of stock for brands in early 2021.
Earlier restrictions required the chip maker Huawei HiSilicon to obtain a license. At this point, many people believed that Huawei should acquire brands from third-party designers such as MediaTek. However, the latest restrictions mean that Huawei may not be able to explore this option.
The US decision for Huawei is not surprising
Jefferies analysts wrote in a report: “The United States is surprisingly closing gaps in direct product rules. This is not entirely surprising. This means that Huawei cannot rely on third-party chip design companies such as MediaTek and Unisoc to continue to produce mobile phones. Broken hope also puts Huawei at risk of survival. “
On August 7, Yu Chengdong said that due to US sanctions, Huawei’s top Kirin series brands could not be manufactured after September 15.
Yu Chengdong said that over the past ten years, Huawei’s chip exploration has shifted from a serious backward, relatively backward, leading to foreclosure. “We have invested a lot of research and development, but unfortunately, in the field of semiconductor manufacturing, Huawei did not participate. We only do chip design, not chip making. Many of our very strong brands cannot be built. We said that in order to solve these problems, technology is needed. “