October 30, 2024

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The US-China trade war is driving a wedge between private businesses on both sides, according to industry watchers.

Huawei Technologies, in particular, has recently been hit hard as Google -- which has a lion’s share of the global mobile operating sector -- has decided to sever ties with it, a decision that will nearly disable the Chinese firm’s digital devices running on the US tech giant’s Android OS. 

Google’s decision came upon the US government’s order blacklisting the Chinese firm on May 20.

Amid the escalating US-China spat, market analysts in South Korea forecast that the retaliatory moves on the Chinese tech giant will likely be a windfall for Korean tech giant Samsung Electronics, which has been bending over backward to keep the No. 1 position in the world’s smartphone market.

“The suspended partnership with Google could seriously undermine Hauwei’s global sales, which accounts for 49 percent of its annual smartphone shipments,” said Song Myung-sub, an analyst at Hi Investment & Securities.

He analyzed that Samsung would be able to snatch a large slice of the global market share -- some 37 million smartphone units this year -- from the Chinese rival. “In the high-end Android market, Samsung is Huawei’s only competitor,” Song added.

Some market analysts are also forecasting the Chinese firm’s annual shipments will drop by 25 percent, compared with 2018 when the company shipped 253 million smartphones in total. Huawei took up 14 percent of the entire global smartphone market last year. The shipment volume of Samsung and US tech firm Apple stood at 291.8 million and 200.6 million, respectively, last year.

Previously, Huawei had been expected to narrow the gap with Samsung this year with shipments estimated at 240 million. Market research firm Fubon Research now believes its shipment could fall to 200 million, a decline from its previous estimate of 258 million.

The anticipated suspension of supplies from US chipmakers, such as Qualcomm, Intel and Broadcom, will likely become a double whammy for the Chinese firm while offering an opportunity for Samsung, according to market analysts.

Samsung, the largest memory chipmaker in the world, runs a contract business, in which the firm builds and supplies non-memory chips at the request of corporate customers. The contract-based chip-making business is often called foundry business.

“The global demand for chips could drop in the short term (due to the Huawei incident), but Samsung could gain some momentum for its large-scale integration, chip and foundry businesses,” said Kim Young-woo, an analyst from SK Securities.

By Kim Young-won (wone0102@heraldcorp.com)