United States Prepares Crackdown on Global Supply of Huawei Chips: Sources – Latest News

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<pre><pre>United States Prepares Crackdown on Global Supply of Huawei Chips: Sources - Latest News
Senior Trump administration officials have agreed to new measures to restrict global chip supply to China's Huawei Technologies, sources familiar with the matter said, as the White House ramps up criticism of China about the coronavirus.

The move comes as ties between Washington and Beijing grow tighter, with both sides exchanging comments on who is to blame for the spread of the disease and an eye-for-an-eye escalation for the expulsion of journalists from both countries.

Under the proposed rule change, foreign companies that use US chip manufacturing equipment. USA They would have to obtain an EE license. USA Before supplying certain chips to Huawei. The Chinese telecommunications company was blacklisted last year, limiting the company's suppliers.

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One of the sources said the rule change aims to curb chip sales to Huawei by Taiwan Semiconductor Manufacturing Co, a major chipmaker for Huawei's HiSilicon unit, as well as the world's largest contract maker.

It is unclear whether President Donald Trump, who appeared to reject the proposal last month, will sign the rule change. But if it ends, it could deal a blow to Huawei and TSMC, also hurting American companies, the sources said.

"This will have a much more negative impact on American companies than on Huawei, because Huawei will develop its own supply chain," said trade attorney Doug Jacobson. "Ultimately, Huawei will find alternatives."

A person familiar with the matter said that the US government. USA It has done everything possible to ensure that impacts on the US industry. USA 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 its 5G networks over espionage concerns. Huawei has denied the allegations.

Most chipmakers rely on equipment produced by American companies like KLA Corp, Lam Research and Applied Materials, according to a report last year from China's Everbright Securities.

The equipment manufacturers did not immediately respond to requests for comment.

The decision came when US officials from various agencies met and agreed Wednesday to modify the Foreign Direct Product Rule, which submits some products made abroad based on US technology or software. USA To the regulations of EE. USA

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

Huawei declined to comment. TSMC said "it cannot answer hypothetical questions and does not comment on any individual customer."

One of the sources said the rule change aims to restrict the sale of sophisticated chips to Huawei and not to older, more commercialized and widely available semiconductors.

"It is impossible to determine the impact until we know the technical thresholds that may apply," said Washington attorney Kevin Wolf, a former Commerce Department official.

"Different foundries make different chips with different capacities, so you wouldn't know which foundries are most affected until you know the technical thresholds," he said.

CHINA-UNITED STATES TENSIONS

The United States blacklisted Huawei in May last year, citing national security concerns. The list of entities, as is known, allowed the US government. USA Restrict sales of products made in the USA. USA To the company and some more limited items made abroad that contain American technology.

But under current regulations, key foreign supply chains remain beyond the reach of US authorities, fueling frustration among China's hawks in the administration and sparking a push to tighten the company's export rules, Reuters reported in November. .

The hawks' efforts were jeopardized last month when Trump reacted strongly to the proposed crackdown, after Reuters and the Wall Street Journal reported that a move was being considered to block global chip sales to Huawei.

"I want our companies to be able to do business. I mean, they put things on my desk that have nothing to do with national security, including chip makers and others. So we're going to quit, and what will they do? They will do those chips in a different country or they will make them in China or elsewhere, "Trump said.

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