U.S blocks Huawei's access to overseas chip manufacturers

The U.S government ups the stakes in the trade war with China by cutting off Huawei's access to overseas chip manufacturers.

The U.S Department of Commerce announced an amended export rule that will block shipments of chipsets to the Chinese company to "strategically target Huawei's acquisition of semiconductors that are the direct product of certain U.S software and technology".

The temporary license which allows U.S companies that are operating wireless networks in the rural areas to continue doing business with Huawei will be extended till 13 August. There would be no further extensions.

All overseas chip manufacturers who use U.S software and technology in their operations are not allowed to ship their products to Huawei unless they have a license from the U.S government.

This means that the U.S has effectively blocked the sales of chipsets from TSMC for Huawei's HiSilicon division. Chipsets that are already in production can be shipped to Huawei, but the shipment needs to be completed within 120 days.

The latest move comes after Huawei was reportedly still using components sourced from U.S firms for the P40 series. A Huawei spokesperson denied the report and stated that the company has "always complied with any export control regulations of various countries, including the United States".

Trade tensions between the U.S and China went up a notch last May when the U.S suspended Huawei's access to its technology including Google's apps and services. The U.S views Huawei as a national security threat as intelligence agencies claim that the Chinese company is funded by the Chinese state government.

U.S President Trump announced in August 2019 that the U.S government will no longer do business with Huawei, but delayed the full ban for Huawei multiple times and added 46 of its subsidiaries to the ban list.

Source: U.S Department of Commerce via The Verge