The US is escalating its crackdown on Huawei by trying to cut off the Chinese company’s ability to source computer processors from overseas chip factories.
On Friday, the US Commerce Department released a new order that bars the chip manufacturers from supplying Huawei with semiconductors or chip designs built with US software or technology. According to the rule, even “foreign-produced” semiconductors meant for the Chinese company fall under the ban so long as they were built with American technology. To resume the sales, US government approval has to be secured.
The new order tries to close a loophole in the White House’s previous attempt to prevent Huawei from sourcing US technologies. Last May, the US Commerce Department placed the Chinese company on an “entity list,” which initially cut off Huawei from the US semiconductor market. However, companies including Intel and Micron eventually began resuming shipments to Huawei on claims their products weren’t technically American-made, but produced overseas, according to The New York Times.
The Chinese company has also been able to source semiconductor technologies from foreign providers including the UK-based ARM Holdings and Taiwan-based chip manufacturer TSMC. Meanwhile, Huawei subsidiary HiSilicon has assumed the main role in designing processors for the company’s smartphones, negating its need to rely on Qualcomm. As a result, the Chinese company’s consumer and smartphone business has continued to grow, even with the US export ban in place.
“Despite the Entity List actions the Department took last year, Huawei and its foreign affiliates have stepped up efforts to undermine these national security-based restrictions through an indigenization effort,” said US Secretary of Commerce Wilbur Ross in a statement. “However, that effort is still dependent on US technologies.”
The White House is trying to restrict the sales on claims Huawei is acting against the US’s national security interests. Federal officials have uncovered evidence the Chinese company has violated US sanctions against Iran and also stole intellectual property from American companies. At the same time, the Trump administration is worried Huawei’s 5G cellular networking technologies could be exploited by the Chinese government to spy on countries across the world.
The hostile relations is why you won’t find too many Huawei phones sold in the US. But the Chinese company still remains popular in Asia and Europe. Although Huawei did not immediately respond to a request for comment, the company has repeatedly denied the spying allegations.
In the meantime, ARM holdings indicated to PCMag it’ll remain a chip design supplier to Huawei. “ARM has been and continues to be in compliance with the guidelines set forth by the US Commerce Department respective to Huawei since they were first announced on May 16, 2019,” the company said in a statement.