US curbs on Huawei may impact South Korea’s recovery

New US restrictions against Huawei Technologies Co. threaten to weigh on South Korea’s economy, which is counting on-chip exports to China to drive its rebound from the coronavirus pandemic.

The US Commerce Department said this week it would further restrict the Chinese company from access to commercially available chips, adding that even foreign firms will be affected if they use US-made design software and gear.

Both Samsung Electronics Co and SK Hynix Inc, South Korea’s two biggest exporters, use US-made equipment while generating a large share of their earnings by trading with Huawei and other Chinese firms. Samsung earned almost 20% of its revenue from China in the latest quarter, while Hynix generated almost 40%.