Sony Might be Affected by the New US Restrictions on Sales to Huawei

US Department of Commerce released an amendment to the restrictions of selling chips to Huawei: "This amendment further restricts Huawei from obtaining foreign made chips developed or produced from U.S. software or technology to the same degree as comparable U.S. chips."

Reuters reports that "For chip suppliers across regions, the ban could also be a setback, as most use U.S. design software from Cadence Design Systems and Synopsys and chip-etching tools from firms that include Applied Materials, experts said.

In Asia, memory chipmakers — including Korea’s Samsung and SK Hynix, Japanese image sensor maker Sony, and Taiwanese chipset maker MediaTek — may be affected, a chip industry source said.

A Sony spokesperson declined to comment but pointed to the company’s comments earlier this month that it would cut its three-year sensor investment plan to adjust to the changing environment in the smartphone market."

FT quotes Jefferies Equity Research Managing Director Atul Goyal estimating that Huawei was Sony’s 2nd largest image sensor customer after Apple, accounting for about 20% of its image sensor operating profits and revenue. “Sony has already reduced image sensor output and . . . [is] already taking into account the Huawei impact in their forecast,” Goyal says.

In the long term, FT sources expect that Sony would be able to compensate some of the lost Huawei revenues by selling more to other Chinese smartphone companies, such as Vivo and Xiaomi.