The U.S will reportedly block shipments of chips to Huawei Technologies. The Trump administration has decided to cut Huawei off from chip shipments from Taiwan’s TSMC the world’s largest contract chipmaker.
There many options that the U.S is considering amongst adding new restrictions on commerce with China’s Huawei. Even though the chip proposal has been drafted but its approval is not guaranteed.
If this step is taken by the U.S it will be a huge blow to the second leading smartphone maker in the world and to TSMC as well.
A source said, “What they’re trying to do is make sure that no chips go to Huawei that they can possibly control.”
Huawei is the epicenter of the technological war going on between the U.S and China. The U.S is convincing its allies to ditch Huawei gear from the next-generation 5G networks claiming that its equipment is being used by China for spying. However, Huawei has more than once denied these allegations.
U.S authorities will alter the Foreign Direct Product Rule if it targets the global chip sales to Huawei. As per the draft proposal, the U.S government will compel the foreign companies that use U.S chipmaking equipment to have a U.S license before they supply chips to Huawei.
The U.S. Commerce Department has not commented on this proposal. But as per a Commerce spokesman the recent U.S. charges against Huawei “reaffirm the need for caution in considering license applications. The U.S. continues to have major concerns about Huawei.”