SK hynix probes use of chips in Huawei phone

South Korean chipmaker SK Hynix said on Friday it is investigating the use of its memory chips in Huawei Technologies’ new Mate 60 Pro smartphone even though the company stopped supplying them to the Chinese maker due to U.S. export restrictions.

“SK Hynix no longer does business with Huawei since the introduction of the U.S. restrictions against the company, and with regard to the issue, we started an investigation to find out more details,” SK Hynix told Nikkei Asia. “Also, SK Hynix is strictly abiding by the U.S. government’s export restrictions.”

The announcement comes after Bloomberg reported on Thursday that SK Hynix’s LPDDR5, an advanced DRAM chip, and NAND flash chips were used in the Mate 60 Pro released last week.

Shares of SK Hynix fell as much as 4.7% in Seoul on Friday morning. The KOSPI benchmark was largely flat.

SK Hynix is the latest company caught up in the intensifying tech conflict between the U.S. and China. Apple shares dropped 2.9% on Thursday on news that Chinese government officials and employees of state-run companies will be banned from using iPhones.

Analysts say that SK Hynix would not have sold the chips in question directly to Huawei and hypothesized that either Huawei had leftover inventory or procured them from multiple distributors in China.

“SK Hynix and Samsung are very sensitive about this issue so they are taking caution not to get involved with any business with Huawei,” said Tom Kang, a director at Counterpoint Technology Market Research.

Kang added that Washington might not take action against SK Hynix, but “the U.S. government might probe the distribution channels to identify if the chip was procured via multiple chains of distributors and agents in the industry.”

In 2020, the U.S. government imposed sanctions on Huawei that blocked the Shenzhen-based company from accessing chips developed or produced with U.S. technology and software. Since then SK Hynix, Samsung Electronics and other chipmakers have stopped offering their semiconductors to Huawei.

Washington has long viewed Huawei as a national security threat, citing its alleged ties with the Chinese Communist Party and Chinese military. Huawei has consistently denied such allegations. Bloomberg