SK hynix shares plummet on Huawei phone chip discovery

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SK hynix shares plummet on Huawei phone chip discovery

Published: 08 Sep. 2023, 17:17 Updated: 08 Sep. 2023, 17:23

JIN EUN-SOO
jin.eunsoo@joongang.co.kr

FILE PHOTO: The Huawei logo is seen at its booth during the Mobile World Congress in Shanghai, China June 28, 2023. [REUTERS]

SK hynix shares nosedived by 4.05 percent Friday upon news that Huawei’s newest smartphones contain the Korean company's microchips, with investors fearing possible U.S. sanctions.

The Korean memory chipmakers’ shares closed at 113,700 won ($85) Friday, down by 4,800 won from the previous trading day.

SK hynix denies chip supply to China’s Huawei

SK hynix’ 12-gigabyte LPDDR5 chip and 512-gigabyte NAND flagship chips were found in Huawei’s latest Mate 60 Pro smartphone during a teardown by consulting company TechInsights at U.S. media outlet Bloomberg's request.

However, SK hynix hasn't sourced its products to Huawei since 2020 after the United States extended export sanctions to ban international companies from selling products based on U.S. technology to the Chinese IT giant without prior notice, citing security concerns.

Huawei could have stockpiled the chips before the sanctions were put into effect or made indirect purchases through intermediaries, according to media reports.

SK hynix said it has opened an internal investigation into the issue, adding that it no longer does business with Huawei.

Local analysts say the market anxiety might derive from fear that the U.S. will impose sanctions on the Korean firm, but added the likelihood of that happening is low.

“The weak share price of SK hynix could continue until additional non-Chinese components like those from Micron is found in Huawei's Mate 60 Pro," said Park Sang-wook, analyst from Hi Investment & Securities.

"However, since it is doesn't seem that SK hynix directly sourced its products to Huawei, it is unlikely that additional sanctions from the U.S. could be imposed on the Korean chipmaker."

BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]