Apple, TSMC Suspend Sales in Russia
As global companies, including Apple and TSMC, have declared the suspension of their product sales to Russia to join U.S. sanctions against the country, Korean companies are pondering whether to follow suit.
According to foreign media outlets on March 2, Apple has recently announced a complete suspension of product sales in Russia. Intel, Nvidia, and AMD have also stopped selling semiconductors to Russia. As they are all U.S. companies, they are excluded from the U.S. Foreign Direct Product Regulation (FDPR) export control measures, but they are believed to have taken preemptive action in line with Washington’s sanctions against Russia.
Taiwan’s TSMC, which manufactures semiconductors using U.S. equipment, also began to halt chip exports to Russia. “The backgrounds of U.S. companies and TSMC’s actions may be diplomatically different, but they quickly took action considering their brand image and reputation,” industry analysts said.
Against this backdrop, concerns are growing at Samsung Electronics and SK Hynix. In particular, Samsung Electronics is the No. player in the Russian mobile phone and home appliance markets. As of the end of October 2021, Samsung Electronics ranked first in the Russian smartphone market with a 34.5 percent share, more than twice as high as that of Apple (14.7 percent). If Samsung suspends product sales in reality, it will suffer greater damage than Apple and Chinese smartphone manufacturers such as Xiaomi may take the No. 1 spot in the Russian market.
“We are internally considering halting sales, but the issue is not something that individual companies can decide,” a company official said. “Samsung Electronics and SK Hynix may put a halt to their chip supply as they did to Huawei in 2020, but they still need time to wait for specific measures from the United States.” At the time of U.S. sanctions against Huawei, Samsung Electronics and SK Hynix virtually stopped supplying chips to Huawei in accordance with the U.S. guidelines that semiconductor sales to Huawei require prior approval from the U.S. government.
Another industry official said that even if exports to Russia are curbed, Korean companies will not suffer big damage because their major customers are in the United States and China. Russia and Ukraine are not highly advanced in IT infrastructure, so their demand for chips for cloud computing and data centers is small, and high-performance semiconductors are not used in home appliances and automobiles. Market research firm TrendForce said in a report released on March 1 that the ongoing war will not have a significant impact on smartphone production.