Memory chips hit by US sanctions on Huawei

Recent US sanctions against China’s Huawei Technologies as a part of the ongoing economic war between the two countries are having a toll on the semiconductor market, according to industry sources.

As of end-May, contract prices for DDR4 8 Gb 2133MHz D-RAM as of May-end stood at $3.75, which was 6.25% lower on-month. NAND 128Gb MLC contract prices fell 1.26% to $3.93 during the same period.

Earlier this month, the Trump administration added Huawei to the Commerce Department’s Entity List, which makes it next to impossible for companies to survive once US firms are discouraged from doing business with them. So far, Google, Intel, Qualcomm and Micron, along with UK-based ARM, have come forward to sever ties Huawei.

At the same time, Huawei -- as the world’s largest maker of telecom equipment -- relies a large part of its supplies on manufacturers all over the world. Any disruptions to its production can have huge repercussions on the global memory chip market.

On May 31, market research firm DRAMeXchange said in a report that latest sanctions from Washington could trigger more volatility in the already sluggish D-RAM market. The report also said Huawei's troubles would affect the entire memory chip market.

“Huawei is facing its biggest crisis since its inception,” it added.