Left Menu
Development News Edition

EXCLUSIVE-U.S. prepares crackdown on Huawei's global chip supply -sources

EXCLUSIVE-U.S. prepares crackdown on Huawei's global chip supply -sources

Senior 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. The move comes as ties between Washington and Beijing grow more strained, with both sides trading barbs over who is to blame for the spread of the disease and an escalating tit-for-tat over the expulsion of journalists from both countries.

Under the proposed rule 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 curbing sales of chips to Huawei by Taiwan Semiconductor Manufacturing Co, a major producer of chips for Huawei's HiSilicon unit, as well as the world's largest contract maker.

It is unclear if President Donald Trump, who appeared to push back against the proposal last month, will sign off on the rule change. But if finalized, it could deal a blow to Huawei and TSMC, hurting U.S. companies as well, sources said. "This is going to have a far more negative impact on U.S. companies than it will on Huawei, because Huawei will develop their own supply chain," trade lawyer Doug Jacobson said. "Ultimately, Huawei will find alternatives."

A person familiar with the matter said the U.S. government has gone to great lengths to ensure impacts on U.S. industry will be minimal. The move could anger Beijing, which has spoken out against a global campaign by the United States to compel allies to exclude Huawei from their 5G networks over spying concerns. Huawei has denied the allegations.

Most chip manufacturers rely on equipment produced by U.S. companies like KLA Corp, Lam Research and Applied Materials, according to a report last year from China's Everbright Securities. The equipment makers did not immediately respond to requests for comment.

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. Attendees likely included top officials from the National Security Council and the U.S. Departments of State, Defense, Energy and Commerce. None of them responded to requests for comment.

Huawei declined to comment, and TSMC did not immediately respond to a request for comment. 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.

“It’s impossible to tell the impact until we know the technical thresholds that may apply," said Washington lawyer Kevin Wolf, a former Commerce Department official. “Different foundries make different chips at different capabilities so you wouldn’t know which foundries are affected the most until you know the technical thresholds,” he said.

U.S.-CHINA TENSIONS The United States placed Huawei on a blacklist in May last year, citing national security concerns. The entity listing, as it is known, allowed the U.S. government to restrict sales of U.S.-made goods to the company and some more limited items made abroad that contain U.S. technology.

But under current regulations, key foreign supply chains remain beyond the reach of U.S. authorities, fueling frustration among China hawks in the administration and prompting a push to toughen up export rules for the company, Reuters reported in November. The hawks’ efforts appeared in jeopardy last month when Trump reacted strongly against the proposed crackdown, after Reuters and the Wall Street Journal reported that a move to block global chip sales to Huawei was under consideration.

"I want our companies to be allowed to do business. I mean, things are put on my desk that have nothing to do with national security, including with chipmakers and various others. So we’re going to give it up, and what will happen? They’ll make those chips in a different country or they’ll make them in China or someplace else," Trump said. (Additional reporting by Mike Stone in Washington, Editing by Chris Sanders, Nick Zieminski and Dan Grebler)

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

Download The Devdiscourse News App for Latest News.



Coronavirus lockdowns to speed up long-pending revamping of supply chains

With millions of production lines impacted, business disruptions to some extent are unavoidable and the lessons learned from this turbulence will leave an everlasting impact on both global and local levels of supply chains....

COVID 19 to catalyze the redefinition of urban planning and sustainability

Until now the urban planning was focused on mitigation to natural disastrous, climate change, pollution, chronic illness and lifestyle diseases. However, the global pandemic of novel coronavirus is going to change the whole narrative of urb...

Ebola to COVID 19: Has Geopolitics prevailed over Professionalism in WHO

World Health Organization WHO is perceived as one of the most professional bodies of the United Nations. However, the role of WHO has come under question in handling outbreak two deadly diseases Ebola Viral Disease EVD and novel Coronaviru...

Trade War, COVID 19 and Beyond: How Pandemic is defining a New World Order

While we are confined in our homes, the world is changing faster than ever. Geopolitics in the time pandemic is defining a new world order. The transformation is happening in almost all the walks of life but the million-dollar question is ...


Latest News

Raina donates Rs 52 lakh for fight against COVID-19 pandemic

Former India batsman Suresh Raina on Saturday donated Rs 52 lakh to the countrys fight against COVID-19 pandemic and urged others also to contribute in these times of health crisis. Rainas contribution is biggest from any Indian sportsperso...

Lockdown: Odisha announces Rs 3,000 for urban street vendors,

Odisha Chief Minister Naveen Patnaik on Saturday announced financial assistance of Rs 3,000 each for street vendors in urban areas and cooked food for 10 lakh rural people during the lockdown. The decision to help street vendors in urban ar...

Europe's virus toll surges, world plunges into recession

Europe was reeling from a staggering surge in coronavirus deaths Saturday, still, days or weeks from what experts desperately hope will be the epidemics peak. Grim new tolls from Italy and Spain came as the IMF confirmed the world economy h...

India's COVID-19 cases top 900: Latest govt data

The number of total COVID-19 cases climbed to 918 in India on Saturday, while the death toll remained at 19, according to the Union Health Ministry. Deaths have so far been reported from Maharashtra 5, Gujarat 3, Karnataka 2, Madhya Pradesh...

Give Feedback