TrendForce examines impact of US component export rules

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Gartner reports component market down due to coronavirus.

Market research group TrendForce recently published an analysis of the U.S. Department of Commerce’s new rules regarding semiconductor technology exports. The organization predicts that Huawei’s inability to buy components made with American technology will not have a devastating impact on its former suppliers. However, the firm notes the government agency’s updated mandates will have a multifaceted impact on the global components sector.

No Massive Impact on Component Vendors

In its study, TrendForce found Washington’s new regulations will not severely impact microelectronics suppliers that previously served as Huawei vendors.

The firm predicts fingerprint sensor brand Goodix, touch and display driver integration (TDDI) company FocalTech, and connectivity chipmaker MediaTek will feel the loss of Huawei’s business. The group also expects Sony will experience a 1.5 percent year-over-year drop in its image sensor business because it cannot sell to the Shenzhen-based telecom.

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TrendForce also notes the Shanghai Manufacturing International Corporation (SMIC) and We Semi will stop dealing with Huawei because of the new U.S. export directives. That said, SMIC’s recent $7.57 billion listing on the Shanghai Stock Exchange will help it rebound from the loss of a major client.

The research organization states RF chip manufacturer Richwave’s relationship with Huawei will not be affected by the Commerce Department’s directives as its products do not feature U.S. developed tech. The firm also speculates Chinese processor maker Unisoc may be able to step in for MediaTek in the smartphone company’s supply chain for the same reason. The analysis concern also believes TDDI supplier Novatek will not be seriously affected by losing Huawei’s support.

Lastly, the Motley Fool reported the Taiwanese Semiconductor Manufacturing Company (TSMC) had already filled Huawei’s spots in its production calendar in June.

Broader Industry Effects

TrendForce explained the Commerce Department’s export restrictions would have varying effects on the smartphone, memory, and display panel sectors.

The firm predicts Huawei will manufacture 30 million to 35 million fewer handsets next year because of a component shortage. As a result, the group anticipates Chinese smartphone makers Xiaomi, OPPO, and Vivo will divvy up its market share. Similarly, the organization believes those three mobile device vendors will fill the purchasing void left by their rival in the NAND and DRAM segment.

However, TrendForce also forecasts Huawei’s absence from the global display market will drive down active-matrix organic light-emitting diode (AMOLED) and low-temperature polycrystalline silicon (LTPS) smartphone panel prices worldwide.

At present, Huawei’s ability to continue operations as telecom is dependent upon it striking a deal with the U.S. government. American made microelectronics technology is too prevalent for the firm to work around. However, if it cannot come to terms with Washinton, the worldwide semiconductor industry can move on without it.

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