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Korean Companies Prudent about Joining Anti-Huawei Campaign
Taking a Wait-and-see Approach
Korean Companies Prudent about Joining Anti-Huawei Campaign
  • By Jung Min-hee
  • May 29, 2019, 09:15
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Major Korean companies that supply parts to Huawei are unlikely to stop transactions with the Chinese company immediately.

Major Korean business groups such as Samsung, SK and LG are unlikely to participate in the anti-Huawei campaign for the time being. They are taking a more cautious approach to the U.S. request for participation in the campaign as they think that it is not a matter for individual companies to decide.

Major Korean companies that supply parts to Huawei, including Samsung Electronics, SK Hynix, Samsung Display, LG Display and LG Innotek, have reportedly arrived at the conclusion that it would be virtually impossible for them to stop trade with Huawei immediately.

The Donald Trump administration, while putting mounting pressure on Huawei, is indirectly requesting companies of U.S. allies to join the anti-Huawei move. But Korean companies appear to have decided to continue to supply parts to Huawei for the time being.

In particular, some Korean companies reportedly told a senior executive of Huawei who recently flew into Korea that they were not planning to stop supplying parts to Huawei. The Huawei executive reportedly contacted Samsung Electronics, SK Hynix and LG Display and asked them for cooperation on the supply of parts, expressing grave concern about the latest U.S. crackdown on Huawei and the suspension of trade with Huawei by some European and Japanese companies.

"I can neither confirm nor deny a Huawei executive's visit to our company," said an official of a Korean company. "Even if a Huawei executive had visited our company, he probably visited to check on the supply of the parts ordered. There have been such visits in the past, and it seems that the recent developments in the trade dispute between the United States and China have brought too much attention to such a visit."

Another company official said that participation in the anti-Huawei campaign is not a matter for an individual company to decide because it is a matter between countries.

These IT companies are worried about the possibility that a second THAAD incident may happen if they decide to suspend trade with Huawei suddenly. They believe that the two cases are different, but considering the symbolic meanings that Huawei carries in China, breaking business ties with Huawei could ignite a massive boycott of Korean products in China.

"The Korean government has not given any guidance to Korean IT companies regarding the matter," said an official of a large Korean company. "There is no reason to immediately stop supplying parts to Huawei, but the situation is so volatile that we have to wait and see for the time being."