EXCLUSIVE-U.S. nears rule-change to restrict Huawei's global chip supply -sources

Senior cabinet officials in the Trump administration agreed to new measures to restrict the global supply of chips to China's Huawei Technologies, sources familiar with the matter said, as the White House ramps up criticism of China over coronavirus. Under the change, foreign companies that use U.S. chipmaking equipment would be required to obtain a U.S. license before supplying certain chips to Huawei. The Chinese telecoms company was blacklisted last year, limiting the company's suppliers.

One of the sources said the rule-change is aimed at restricting the sale of sophisticated chips to Huawei and not older, more commoditized and widely-available semiconductors. Because most chipmaking equipment used worldwide relies on American technology, the change would represent an expansion of export control authority that some trade experts have said would anger U.S. allies.

It is unclear if President Donald Trump, who appeared to push back against the proposal last month, will sign off on the rule change. The decision came when U.S. officials from various agencies met and agreed on Wednesday to alter the Foreign Direct Product Rule, which subjects some foreign-made goods based on U.S. technology or software to U.S. regulations, the sources said.

The U.S. Department of Commerce, which would have a role in enacting any rule change, did not have an immediate comment.

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