Micron cuts off supply to Huawei, domestic storage industry will be impacted

Memory giant Micron has confirmed that it will stop supplying Huawei after September 14. At that time, no matter whether it is DRAM or Flash memory chips, they will no longer be shipped to Huawei. After Micron took the lead in calling the halt, the industry expects that foreign memory giants such as Samsung, SK Hynix and Toshiba, as well as domestic memory manufacturers such as Nanya Technology (2408) and Macronix (2337) will follow suit, and their short-term operations will inevitably be affected.

The U.S. Department of Commerce recently announced the expansion of the ban. All semiconductor suppliers using U.S. equipment are no longer allowed to supply Huawei and its subsidiaries. First, TSMC announced that it would no longer ship to Huawei after September 15, and then major IC design companies such as Qualcomm and MediaTek were also affected by the ban.

Now even Micron, which previously obtained the shipment license from the US Department of Commerce, has recently announced that it will no longer ship any products to Huawei after September 14. Since Micron is the world's third largest DRAM manufacturer and the world's fifth largest Flash manufacturer, the announcement of a suspension of supply will have great symbolic significance, indicating that under the US ban, other memory manufacturers will also follow suit.

Among the major international memory manufacturers, Samsung, SK Hynix, etc. are Huawei's largest sources of non-US memory. Since most of the supply of semiconductor instruments and equipment comes from Applied Materials and ASML, etc., if the export ban on Huawei is not implemented in accordance with the US Department of Commerce's ban standards, it may be subject to US sanctions in the future.

The industry believes that Samsung and SK Hynix may also comply with the US Department of Commerce's ban in the future in order to continue operating in the memory market. In addition to the memory business, Samsung also has a wafer foundry business, and its advanced semiconductor processes are more dependent on major US equipment manufacturers. Therefore, it is very likely that Korean manufacturers will stop supplying.

In addition, among Taiwan's memory manufacturers, Nanya Technology and Macronix are likely to be affected. Macronix previously stated that its memory products have been introduced by 5G base station manufacturers in Japan, South Korea and mainland China, including Huawei.

Nanya Technology was affected by the Sino-US trade war in 2019, so the proportion of revenue shipped to Huawei has reached a single-digit level, and the impact is relatively low. The industry believes that under the effect of the Huawei ban, the short-term operations of global memory manufacturers will be impacted, but driven by the demand for 5G and AI, the capacity of DRAM and Flash used in servers and smartphones is bound to increase again, so long-term operations are still expected to be positive.