Huawei says ‘pernicious’ United States chip restrictions threaten global economy

Tuesday, 19 May, 2020

Despite the ban, Huawei has continued to use US software and technology, the Commerce Department said, hence Friday's move to amend an export rule. In order for Huawei to continue to receive some chipsets or use some semiconductor designs tied to certain USA software and technology, it would need to receive licenses from the Commerce Department.

But despite TSMC stating it would be "following the USA export rule change closely", the Hsinchu-based chipmaker added it would not disclose order details and slammed the Nikkei report as "purely market rumour", the South China Morning Post reported on Monday.

The US has now extended the order for another 12 months despite never providing evidence to support its claims.

In this photo taken on 27 May 2019, a Huawei logo is displayed at a retail store in Beijing.

The move is created to inhibit Huawei from producing and designing its own chips, a senior department official said. Krach has urged US allies and partners to join Washington in aligning their domestic export control laws to address "the very real security threat" posed by Huawei and China.

Under the new rules, foreign semiconductor makers must obtain a U.S. license to ship Huawei-designed semiconductors to the Chinese company that were produced using United States technology.

The conflict is politically explosive because Huawei is more than just China's most successful private company. China and Huawei have threatened retaliation should the US enact further measures to constrain the country's largest tech company.

"The Commerce Department said in a statement Friday that the new restrictions would narrowly and strategically" target Huawei's acquisition of semiconductors that it designs built-in overseas foundries that use U.S. software and technology. Such a ruling was issued on Friday by the US Commerce Department.

The source, who is described as close to China's government, the Global Times that China was planning countermeasures, such as "imposing restrictions" against USA companies like Apple, Cisco, and Qualcomm.

The previous rule blocked Intel and Qualcomm from selling chips to Huawei. "The semiconductor industry supply chain is extremely complex, and is served by a broad collection of worldwide suppliers".

For its part TSMC is one of the world's largest chip fabricators and, coincidentally or not, has recently struck a deal to establish a 5nm foundry in the US. It added that it "categorically opposes" Washington's latest move.

In response, the company and others in China accelerated efforts to manufacture such chips domestically. "We tend to approach Huawei with some concern but this is a measure that gives the USA government visibility into what is moving".

Since May of previous year, Washington has banned U.S. firms from doing business with Huawei and its affiliates without authorization, citing national security concerns.

Guo said that Huawei spent US$18.7 billion (S$26.7 billion) buying from United States suppliers a year ago and would continue to buy from them if the USA government would allow it. This week, it added another 90 days.

The recent move is one of several restrictions that the U.S. government has put on Huawei in the past year.

Such measures may allow Huawei to avoid restrictions and secure supply chains for some handsets, although no further news on whether SMIC will boost production for additional Kirin processors has been reported. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Keep comments relevant to the article.