The arrest of Huawei Technology Co (華為) chief financial officer Meng Wangzhou (孟晚舟) in Canada has stoked fears of potential risks for Taiwanese companies in Huawei’s supply chain should the incident unravel a ceasefire in the US-China trade war, Jih Sun Securities Investment Consulting Co (日盛投顧) said yesterday.
Meng, the daughter of Huawei founder Ren Zhengfei (任正非), was arrested on Dec. 1 in Vancouver on an extradition warrant issued by the US on allegations that Huawei tried to evade US sanctions on Iran.
The incident could lead to the US banning imports of Huawei products or stricter restrictions on US manufacturers to limit the sale of key components to the Chinese company as was the case with telecommunications equipment supplier ZTE Inc (中興) earlier this year, Jih Sun said in a report.
US technology heavyweights, including Qualcomm Inc, Intel Corp, Broadcom Inc and Micron Technology Inc, supply chips to Huawei, which was last year the world’s No. 5 chip consumer, according to Gartner Inc, Jih Sun said.
Although Huawei has other sources, supply can be scant and might affect its operations and indirectly disrupt its supply chain in Taiwan, Jih Sun said.
Huawei sold more than half of its products to Chinese companies and generated only 6 percent of its revenue in the US, Jih Sun said.
The company has 2,000 suppliers worldwide, with many of them in Taiwan, it added.
“The impact on Taiwan’s supply chain would be more severe if US businesses were barred from supplying electronic components to the Chinese firm,” the report said. “Largan Precision Co (大立光) and Universal Microwave Technology Inc (昇達科技) might see a greater impact, given their bigger revenue exposure.”
Huawei, which is also the world’s third-largest mobile phone maker with a 10 percent market share, accounted for about 15 percent of revenue at Largan, which supplies camera lenses to the Chinese company, Jih Sun said.
About 20 percent of Universal Microwave’s revenue came from Huawei, which buys its telecommunications components, Jih Sun said.
Taiwanese chip designers, such as MediaTek Inc (聯發科), foundry company Taiwan Semiconductor Manufacturing Co (台積電), thermo module maker Asia Vital Components Co (奇鋐) and printed-circuit board manufacturer Unimicron Technology Corp (欣興) all supply products to Huawei, although they have smaller exposures, with revenue contribution of less than 5 or 10 percent, Jih Sun said.
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