The US government is said to be considering new rules that will require chip manufacturers outside the country to obtain further licenses in order to use American tech to build kit for Huawei.
This could mean that contract chip makers like TSMC, which makes hardware for Apple and Qualcomm as well as Huawei, would not be able to supply the Chinese giant.
This restriction is one of several options set to be considered in high-level meetings slated to take place this week and the next, with a Reuters report claiming that even though a draft for this proposal is ready at the moment, it may not get a final nod.
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According to Everbright, as of now, there are no chip manufacturing facilities in China which use only Chinese equipment to manufacture chips. If the proposal gets a go ahead, it may prove devastating for Huawei - which despite a raft of recent restrictions, remains the world’s second most popular smartphone company.
Reuters reported that its source as saying, "What (the US is) trying to do is make sure that no chips go to Huawei that they can possibly control.”
Huawei has been caught in the crossfire between China and the US since 2019 when it was blacklisted by the Trump govt. alleging data theft and espionage. The US has also been urging its allies to not allow Huawei’s equipment for 5G network, maintaining that Huawei is a national security risk.
Huawei, however, has always denied these allegations.
US and foreign companies which were looking to supply materials to Huawei were required to seek an additional license in the past, however, Chinese firms often managed to get supplies via subsidiaries or foreign partners of their US partners.
The US has been mulling a further clampdown on Huawei for some time, despite members of the Trump administration being reluctant about taking such a drastic decision, as it may move innovation out of the US and ultimately benefit China.