The Trump administration announced on Monday that it would further tighten restrictions on Huawei Technologies, aimed at cracking down on its access to commercially available chips.
The US Commerce Department’s action, first reported by Reuters, would extend sanctions announced in May aimed at preventing the Chinese telecommunications giant from acquiring semiconductors without a special license – including chips made by foreign firms known to be is developed or produced with US software or technology.
The administration will also add 38 Huawei affiliates in 21 countries to the US government’s economic blacklist, the sources said, raising the total to 152 affiliates since Huawei was first added in May 2019.
Commerce Secretary Wilbur Ross told Fox Business that the ban on Huawei-designed chips put in place in May “prompted them to take some safeguards. They were going through third parties,” Ross said. “The new rule makes it clear that any use of US software or US fabrication equipment is banned and requires a license.”
Secretary of State Mike Pompeo said the rule change would “prevent Huawei from bypassing US law through alternative chip production and the provision of off-the-shelf chips.” “Huawei has consistently tried to evade the US sanctions imposed in May,” he said in a statement.
Huawei did not immediately comment.
With US-China relations at their worst in decades, Washington is prompting governments around the world to bail out Huawei, arguing it would hand over data to the Chinese government for espionage. Huawei denies spying for China.
Commerce said the new actions, effective immediately, should halt Huawei’s efforts to circumvent US export controls.
“This makes it clear that we are covering off-the-shelf designs that Huawei is looking to buy from third-party design houses,” a Commerce Department official told Reuters.
A new separate rule requires companies to be on an economic blacklist to obtain a license when a company such as Huawei on the list acts as a “buyer, intermediate consignee, end consignee, or end user”.
The department also confirmed that it would not extend a temporary general license that expired on Friday to users of Huawei equipment and telecommunications providers. The parties will now have to submit a license application for the previously authorized transaction.
The Commerce Department is adopting a limited standing authorization for Huawei entities to allow networks and equipment “critical to maintaining the current integrity and credibility of existing security research”.
The current US sanctions have already had a huge impact on Huawei and its suppliers. The May restrictions will not be fully implemented until September 14.
On August 8, financial magazine Caixin reported that Huawei would stop manufacturing its flagship Kirin chipset next month due to US pressure on suppliers.
Huawei’s HiSilicon division has relied on software from American companies such as Cadence Design Systems and Synopsis Inc. to design its chips, and outsourced production to Taiwan Semiconductor Manufacturing Company (TSMC), which uses equipment from American companies.
TSMC has said that it will not send wafers to Huawei after September 15.
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