Samsung shares surge amid Huawei's problems

SEOUL • Shares in Samsung Electronics climbed nearly 3 per cent yesterday on the back of its chief rival Huawei's mounting problems, including Google's decision to sever ties with the Chinese mobile-phone maker.

Analysts warn that the move could also lead to a fall in Chinese semiconductor demand.

Internet giant Google, whose Android operating system powers most of the world's smartphones, said this week it is cutting ties with Huawei to comply with an executive order by US President Donald Trump.

Investors have bet that Huawei's loss could benefit Samsung, the world's biggest smartphone maker, which has been facing increasing competition from its Chinese rival.

Samsung's shares were up 2.7 per cent at closing yesterday.

Analysts say the ban will hurt Huawei's ability to sell phones outside China, allowing Samsung to consolidate its position at the top of the global market.

Samsung accounted for 23.1 per cent of global smartphone sales in the first quarter of this year, said industry tracker International Data Corporation, while Huawei had 19 per cent.

But Huawei's troubles may be a double-edged sword for Samsung - also the world's biggest chipmaker - if they lead to a plunge in demand for semiconductors.

China dominates purchases from Asian chipmakers and bought 51 per cent of their shipments in 2017, Bloomberg reported.

AGENCE FRANCE-PRESSE

A version of this article appeared in the print edition of The Straits Times on May 22, 2019, with the headline 'Samsung shares surge amid Huawei's problems'. Print Edition | Subscribe