The United States Department of Commerce on May 16th stated that Huawei and sixty-eight affiliated enterprises based in locations including Mainland China, Hong Kong, Singapore, Taiwan, and Germany will be placed on an “entity list.” If Huawei and their affiliated companies do not obtain export licenses from the U.S. government, they will be barred from purchasing components from American companies.

Thirty-seven Taiwanese manufacturers and related companies which closely cooperate with Huawei will be greatly affected, including Largan Precision Co.,Ltd. and Hon Hai’s flagship Foxconn Industrial Internet Co., Ltd (FII). A large portion of these companies’ revenue comes from Huawei; therefore, they are likely to feel the greatest impact.

It is estimated that up to 20% of Largan’s revenue comes from Huawei; whereas, 10% of Taiwan Semiconductor Manufacturing Company’s (TSMC) revenue and as little as 5% of Foxconn’s revenue come from Huawei. Nevertheless, Hon Hai’s flagship FII is responsible for assembling Huawei products, which accounts for an estimated 20%-25% proportion of their earnings.

(TR/ Phil Sweeney)