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Trump administration said to be preparing crackdown on Huawei's global chip supply
- Senior officials in the Trump administration are said to have agreed to new measures to restrict the global supply of chips to China’s Huawei Technologies
- The move comes as ties between Washington and Beijing grow more strained over the coronavirus pandemic
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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 the novel 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 US chipmaking equipment would be required to obtain a US license before supplying certain chips to Huawei. The Chinese telecoms company was blacklisted last year, limiting the company’s suppliers.
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One of the sources said the rule-change is aimed at curbing sales of chips to Huawei by Taiwan Semiconductor Manufacturing Co (TSMC), 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 finalised, it could deal a blow to Huawei and TSMC, hurting US companies as well, sources said.
“This is going to have a far more negative impact on US companies than it will on Huawei, because Huawei will develop their own supply chain,” trade lawyer Doug Jacobson said. “Ultimately, Huawei will find alternatives.”
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