On Friday, U.S. officials decided to cut funding to the Chinese technology giant Huawei and tighten sanctions against a company that Washington sees as a threat to national security.
The Department of Commerce announced that it is extending the scope of the sanctions to semiconductor designs developed using U.S. software and technology.
Officials said Huawei bypasses the sanctions by buying chips and components manufactured worldwide using U.S. technology.
The statement overlaps with Huawei’s efforts to undermine U.S. export controls, the trade department said.
The department said it will focus closely and strategically on the acquisition of Huawei’s semiconductor devices, which are direct products of certain software and technology in the United States.
Trade Secretary Wilbur Ross said that although Huawei is trying to develop its own components in response to U.S. sanctions, these efforts still depend on U.S. technology.
This is the final step against Huawei, one of the world’s largest technology and smartphone companies, which, according to U.S. officials, steals U.S. trade secrets and helps Beijing in its espionage efforts.
Huawei has denied its links with the Chinese government and the sanctions have increased trade tensions between the United States and China.
The latter action puts America first, U.S. companies first, and U.S. national security first, according to a statement by a senior Department of Commerce official.
U.S. officials said the new rules will have a 120-day grace period. According to this text, all chips destined for Huawei or its subsidiaries must be licensed.
A senior State Department official who joined a request for new measures by journalists said the measure would not necessarily deprive Huawei of access to the products, but would require a license that would allow Washington to control the technology.
There is no reason to jump to conclusions about the consequences, the official said.
– The Taiwanese chipmunk in the United States –
In a separate announcement, U.S. officials announced that Taiwan Semiconductor Manufacturing Corporation plans to invest $12 billion in a U.S. nanometer foundry for the production of semiconductors.
The agreement will make a difference in the US semiconductor industry, which will help strengthen US national security and our economic prosperity, said Secretary of State Mike Pompeo.
The officials stated that the two notices were irrelevant. However, Moor Insights & Strategy analyst Patrick Moorhead said that both are linked to attempts to cut China and Huawei off from the U.S.’s key technologies.
The United States is concerned about feeding Huawei, who sees it as a threat with American technology that could turn around and spy on them or their allies, Wallhead said.
In the case of TSMC, there were concerns that China could invade Taiwan physically or electronically on the basis of TSMC.
Last year Washington said it would blacklist Huawei for the U.S. market and for the purchase of essential U.S. components, although it has extended a series of deferral arrangements to give U.S. companies working with Huawei time to adjust.
On Friday, he extended the suspension for another 90 days, but said it was unlikely the exemptions would be further extended.
A senior Trade Ministry official said the grace period was intended to facilitate the transition for those using Huawei material, but warned that organisations relying on the material would be encouraged to prepare for the transition by August.
Washington was particularly interested in preventing Huawei from developing 5G or fifth generation wireless networks in the United States and Allied countries, arguing that such systems would pose a threat to security.
That’s what it looks like: Huawei and supply chain security – Major geopolitical debate