Amid US sanctions against Huawei, several Japanese tech companies are at risk of declining profits. To avoid this, Sony and Kioxia are requesting permission from the United States to resume supplying components to the Chinese giant, reports the Nikkei daily.
Japanese technology companies Sony and Kioxia have submitted an application to the US Department of Commerce for approval to satisfy the Chinese company Huawei, which is the subject of the American sanctions, reports this Sunday, October 4 the daily Nikkei.
Without Commerce Department approval, Sony and Kioxia’s profits could be impacted.
Sony and Kioxia losses
Sony is the world’s leading supplier of image sensors for mobile phones. Huawei is said to buy nearly a fifth of the Japanese company’s image sensors for around 1,000 billion yen (eight billion euros), making it the second-largest buyer after Apple.
Toshiba’s spin-off company Kioxia could also feel the repercussions of the sanctions against Huawei. Smartphone memory chips make up around 40 percent of the company’s sales, with Huawei accounting for several percent of the total.
The Japanese, Taiwanese and South Korean companies together supply 2.8 trillion yen (22.6 billion euros) of components to Huawei each year, said Akira Minamikawa, director of British research firm Omdia. This business would be left in limbo if Huawei’s production was halted.
After banning the use of Huawei products by US companies, theadministration Trump also placed the Chinese giant on a commercial blacklist on May 17, 2019 and launched a global campaign to oust it from the 5G market.
The United States has called on many countries, especially in Europe, not to use Huawei infrastructure for the deployment of the new 5G network. Washington has also decided to limit the Chinese giant’s chip manufacturing capacity.
Huawei, which is the world’s largest telecom equipment supplier, has been questioned by the Trump administration, which evokes a risk of espionage on behalf of the Chinese government. The United States also accuses Huawei of stealing trade secrets, but Beijing and the company strongly deny the claims.