Samsung and LG will reportedly soon stop supplying display panels to Huawei

Huawei could also face difficulties sourcing other key components such as RAM and storage for its phones.

What you need to know

• Samsung and LG's display units have reportedly decided to stop supplying panels to Huawei after September 15.
• New restrictions imposed by the U.S. last month bans companies from selling chips made using American equipment to Huawei without a special license.
• Huawei will now have to rely mainly on China's BOE for premium display panels.

A new report published by South Korea's Chosun Biz has claimed Samsung and LG are both going to stop supplying premium smartphone display panels to Huawei after September 15, due to the recent U.S. restrictions.

The stricter export control rules, which were introduced by the U.S. last month, require companies using American technology to obtain a special license before selling chips to Huawei. The ban also includes chips that are used to operate display panels. Both Samsung and LG expect the U.S. move to have a minor impact on their display businesses, as Huawei is far from their biggest customer.

Huawei will now have to increase its reliance on China's BOE for display panels. The report also says Huawei has already started testing display panels from other Chinese display makers such as Visionox, Tianma, and CSOT.

The news comes just a day after a report out of South Korea claimed Huawei plans to produce only around 50 million smartphones in 2021 due to the U.S. sanctions.

TSMC, which manufactured Kirin chipsets for Huawei's HiSilicon subsidiary, will also stop supplying to the Chinese tech giant after September 15. Since the company cannot produce its own chips now, chip makers like Qualcomm and MediaTek have shown interest in selling 5G mobile chipsets to Huawei.

A deal with Huawei could make Qualcomm's market advantage insurmountable, and that's a problem