'Huawei Effect' Affecting Korean Parts Makers
The so-called “Huawei effect” is clearly noticeable in the global electronics parts industry. Sales of Taiwanese information technology (IT) companies that supply parts to Huawei have sharply increased.
Taiwan's camera lens maker Largan Precision posted US$127.5 million in sales in March, up 55 percent from the previous month and 24.9 percent up year on year. Largan Precision supplies lens modules to Huawei. MediaTek, a Taiwanese company that produces application processors and modems, also saw its sales in March climb 57.6 percent from the previous month to US$723.5 million, hitting the highest point in six months.
Recently, Taiwanese electronic parts makers' earnings have significantly improved thanks to Huawei’s launch of flagship smartphones. In addition, industry watchers believe they also benefited from the U.S.-China trade conflict. "As the United States is stepping up efforts to hold Chinese companies in check, Huawei and other Chinese IT companies are changing their parts suppliers, which is having a big impact on the performance of electronic parts makers," an industry official said.
This change is expected to have a significant impact on electronic parts makers in Korea and Japan which supply parts to Huawei, too. “As the United States put pressure on Chinese IT companies for security concerns, Huawei became concerned about parts supply, and recently asked Japanese parts makers including Murata Manufacturing to ramp up supply,” Japan’s Nikkei reported in March. Samsung Electro-Mechanics, which produces multi layer ceramic capacitors (MLCCs) and camera modules, is also expected to be affected by the big change from Huawei.