U.S. Commerce Department further restricts Huawei’s access to U.S. chip design hardware and software

In a significant development, the Trump Administration announced that it will further tighten the screws on Huawei Technologies Co, and crack down on its access to commercially available semiconductors.

The development underscores the U.S. Commerce Department’s intent to expand restrictions that were announced in May 2020 which were aimed at preventing the Chinese company from obtaining semiconductors without a special license when such chips were developed or produced with U.S. technology or software.

Washington has also added 38 Huawei affiliates in 21 countries to the U.S. government’s economic blacklist, said sources raising the total number of affiliates to 152.

In an interview with Fox Business, U.S. Commerce Secretary Wilbur Ross stated, restrictions placed on chips designed by Huawei imposed in May “led them to do some evasive measures. They were going through third parties. The new rule makes it clear that any use of American software or American fabrication equipment is banned and requires a license.”

In a tweet, Secretary of State Mike Pompeo said, the U.S. government “dealt a direct blow to Huawei and the repressive Chinese Communist Party by further limiting Huawei’s ability to acquire U.S. technology and compromise the integrity of the world’s networks and Americans’ private information.”

Huawei did not immediately comment.

U.S.-China relations have hot their nadir since decades, with other governments across the globe along with the United States squeezing Huawei over the handing over of crucial data to the Chinese government for spying.

Huawei has denied that it spies for China, in contrast to China’s pervasive and insidious National Intelligence Law which obliges citizens and companies to spy on behalf of the State.

It “makes clear that we’re covering off-the-shelf designs that Huawei may be seeking to purchase from a third-party design house,” said a Commerce Department official.

Officials from the U.S. Commerce Department declined comment on whether they would approve any licenses for chipmakers to supply Huawei or whether any applications were pending before it.

In a statement, the Semiconductor Industry Association, stated, “these broad restrictions on commercial chip sales will bring significant disruption to the U.S. semiconductor industry. We are surprised and concerned by the administration’s sudden shift from its prior support of a more narrow approach intended to achieve stated national security goals while limiting harm to U.S. companies.”

According to a separate Commerce Department rule, companies that have been placed on the economic blacklist will need to obtain a license when a company on the list, including Huawei, acts “as a purchaser, intermediate consignee, ultimate consignee, or end user.”

The department also confirmed that it will not extend a temporary general license that expired last Friday for users of Huawei devices and telecommunication providers. Parties must now submit license applications for transactions previously authorized.

This non-extension of temporary general license includes the usage of “personal consumer electronic devices.”

However, the Commerce Department has allowed a limited permanent authorization for Huawei entities to allow “ongoing security research critical to maintaining the integrity and reliability of existing” networks and equipment.

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