It is absolutely difficult to even remember that Huawei was going to enter the US market. That plan has since been jettisoned as the company fights to wade through the barrage of sanctions the US throws at it. Just recently, Washington extended the ban which prevents Huawei from accessing US technology.
US authorities are now reportedly mulling the idea of blocking shipments of semiconductors to Huawei Technologies from global chipmakers. The U.S. Commerce Department disclosed recently that it was amending an export rule to “strategically target Huawei’s acquisition of semiconductors that are the direct product of certain U.S. software and technology.”The department added the “announcement cuts off Huawei’s efforts to undermine U.S. export controls.”
The move could see Huawei lose the window to do business with TSMC. Although Huawei manufactures its own chipset, Hisilicon is a fabless manufacturer and outsource final production to TSMC.
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Under the rule change, foreign companies that use U.S. chipmaking equipment will be required to obtain a U.S. license before supplying certain chips to Huawei, or an affiliate like HiSilicon. In order for Huawei to continue to receive some chipsets or use some semiconductor designs tied to certain U.S. software and technology, it would need to receive licenses from the Commerce Department.
The rule change is to “prevent U.S. technologies from enabling malign activities contrary to U.S. national security and foreign policy interests,” Commerce Secretary Wilbur Ross said in a statement. He added that Huawei and its affiliates “have stepped-up efforts to undermine these national security-based restrictions.”The Commerce Department said the rule will allow wafers already in production to be shipped to Huawei as long as the shipments are complete within 120 days from Friday. Chipsets would need to be in production by Friday or they are ineligible under the rule.
This action could ramp up tensions with China but has been a long time coming. There have been rumours Trump could extend the ban to prevent companies from supplying Huawei products manufactured using US technology. As a result, Huawei had ramped up inventory orders from TSMC and that was evident in the semiconductor company’s financial report for Q1 2020. Huawei has been able to wiggle through previous obstacles and may do the same in this case. The company eyes Chinese semiconductor company SMIC based in Shanghai and it was recently disclosed that the Kirin 710A manufactured in a 14nm process is the first SMIC-manufactured chipset for Huawei.
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