The on-going war between Huawei and the United States is still dragging on. As per the new reports, some senior officials in the Trump administration have now agreed to new measures aimed at restricting global supply of chips to Huawei Technologies.
According to the report, a rule change has been proposed in which foreign companies that use chipmaking equipment of the United States would be required to obtain a license before supplying certain chips to Huawei.
The decision came when U.S. officials from various agencies met and agreed to alter the Foreign Direct Product Rule, which subjects some foreign-made goods based on U.S. technology or software to U.S. regulations.
Do note that the Chinese giant has already been blacklisted by the United States, limiting the number of suppliers. With Huawei being put on Entity List, US-based companies doing business with the Chinese company needs to take a special permission from the govt.
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A source aware of this new proposed rule development says that it is aimed at curbing sales of chips to Huawei by Taiwan Semiconductor Manufacturing Co (TSMC), which apart from being the world’s largest contract maker, is also a major producer of chipsets for Huawei’s own HiSilicon semiconductor unit.
If the proposed rule change passes, then it could be a major blow to TSMC and Huawei, and will also hurt the U.S.-based companies. While the United States government has been working on its anti-Huawei campaign, several US-based chipset makers have asked the government to reconsider its position arguing that it is more hurtful to the US companies and undermines their ability to compete globally.
The development comes at a time when the White House is ramping up its criticism of China over coronavirus. The US-China relationship seems to be growing more strained as both the countries are trading barbs over who is to blame for the spread of the disease.
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