US eats into Huawei chips, China considers counter - Mobile World Live

US eats into Huawei chips, China considers counter

15 MAY 2020

China threatened retaliation against prominent companies including Qualcomm and Apple, Global Times reported, after the US moved to close a loophole enabling Huawei to continue using chips made using domestic technology despite a trade block.

More than a year after adding Huawei to a trade blacklist, the Department of Commerce (DoC) clamped down on the vendor accessing components made overseas but which featured US-made software and technology.

In a statement, the DoC said a rule change would “narrowly and strategically target Huawei’s acquisition” of semiconductors produced abroad, requiring companies using US technology to obtain a licence before supplying components to Huawei. It added a waiver will be granted for items already in production as of 15 May, provided they are shipped within 120 days.

Global Times reported China was weighing various countermeasures, including the possibility of adding US companies to an “unreliable entity list”, imposing restrictions on their operations or launching investigations into their business practices.

The DoC move came shortly after key Huawei supplier Taiwan Semiconductor Manufacturing Company (TSMC) revealed plans to build a $12 billion semiconductor factory in the US, its second such facility in the nation.

Huawei reportedly spent a reasonable portion of 2019 lining up deals to prepare for the DoCs latest move.

The DoC separately issued what it said would likely be a final 90-day extension of a temporary reprieve allowing companies to continue business with Huawei despite the 2019 trade ban, pushing back implementation to 13 August.

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Diana Goovaerts

Diana is Mobile World Live's US Editor, reporting on infrastructure and spectrum rollouts, regulatory issues, and other carrier news from the US market. Diana came to GSMA from her former role as Editor of Wireless Week and CED Magazine, digital-only...

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