The US government has imposed new restrictions on Chinese tech giant Huawei Technologies Co’s (華為) ability to use US technology, stepping up a conflict with China over industry development and security, with Beijing urging Washington to stop “unreasonable suppression” of Chinese firms.
US Secretary of Commerce Wilbur Ross on Friday said that Washington wants to prevent Huawei from evading sanctions imposed earlier on its use of US technology to design and produce semiconductors abroad.
“There has been a very highly technical loophole through which Huawei has been able to in effect use US technology,” Ross told Fox Business. “We never intended that loophole to be there.”
Huawei, China’s first global tech brand and a maker of networking equipment and smartphones, is at the center of the US-Chinese conflict over Beijing’s technology ambitions.
US officials have said that Huawei is a security risk, which the company has denied.
China’s government has accused Washington of misusing security warnings to harm a rising competitor to US technology companies.
Under the new rules, foreign semiconductor makers must obtain a US license to ship Huawei-designed semiconductors to the Chinese company that were produced using US technology.
The move “looks like a victory for the people who really want to drive the nail, or what they think will be the nail, in Huawei’s coffin,” Council on Foreign Relations senior fellow Adam Segal said.
China threatened retaliation against US companies.
Chip design and manufacturing equipment used in the world’s semiconductor plants is mostly US-made, so the new rule affects foreign producers that sell to Huawei and affiliates including HiSilicon Technologies Co (海思半導體), which makes chips for supercomputers with scientific and military uses.
The US Department of Commerce said that foreign foundries would be granted a 120-day grace period for chips already in production.
Huawei did not respond to a request for comment, but China’s state-run Global Times on Friday threatened countermeasures.
Beijing could include restrictions on US companies including Qualcomm, Cisco and Apple, as well as threaten to suspend purchases of Boeing aircraft, it said.
The new rules would block companies such as Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) from providing semiconductors to Huawei.
TSMC said that it was “following the US export rule change closely.”
The semiconductor supply chain is “extremely complex,” TSMC said, adding that it was working with lawyers to “conduct legal analysis and ensure a comprehensive examination and interpretation of these rules.”
TSMC on Friday announced plans to build a chip plant in Arizona.
The Global Times said that “it seems the US is ratcheting up efforts to pinch China’s high-tech companies,” calling the move an element of US President Donald Trump’s re-election strategy.
“US suppression has become the No. 1 challenge to China’s development,” it added.
Yesterday, the Chinese Ministry of Foreign Affairs said in a statement that “the Chinese government will firmly uphold Chinese firms’ legitimate and legal rights and interests.”
“We urge the US side to immediately stop its unreasonable suppression of Huawei and Chinese enterprises,” it said.
The Trump administration’s actions “destroy global manufacturing, supply and value chains,” it added.
Last year, the Trump administration barred US firms from using Huawei technology or providing technology to the Chinese firm without government approval, deeming it a national security risk.
The department exempted a narrow list of products and services, and has extended that waiver to reduce the impact on US wireless carriers that use Huawei technology. This week, it added another 90 days.
Huawei responded by removing US components from its core products.
The new restrictions are separate from those exemptions, but loopholes have allowed US companies to supply Huawei with chips made outside of the US.
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