Trump administration is looking at a new tack in their war on Huawei. USA has not been as successful as they hoped in convincing allies to not purchase their 5G technology, and the company actually managed to increase phone sales after their access to Google’s Android was blocked.
Now the latest move being considered is blocking their access to chip fabricators such as Taiwan’s TSMC, who makes chips for a wide variety of companies, including Apple and Qualcomm.
The plan, following proposed changes to the US Department of Commerce’s Foreign Direct Product Rule, would require companies who use US technology to create a product (in this case using US chip manufacturing machines) to seek a license to sell to Huawei.
The US has reportedly been frustrated that Huawei has been able to circumvent restrictions placed on trade with US companies with the Chinese giant; by using the vast number of supply chains beyond the reach of the USA.
“What they’re trying to do is make sure that no chips go to Huawei that they can possibly control,” one Reuters source noted.
A Commerce spokesman said recent U.S. charges against Huawei; including conspiring to steal trade secrets; “reaffirm the need for caution in considering license applications. The U.S. continues to have major concerns about Huawei.”
“There is no production line in China that uses only equipment made in China; so it is very difficult to make any chipsets without U.S. equipment,” wrote China’s Everbright Securities.
Some members of the Trump administration, however, worry that the restrictions may backfire; and merely result in innovation moving away from the USA and ultimately benefit China.
The proposals, amongst other options, are reportedly being considered; at high-level meetings this week and next week.