U.S. Blocks Global Chip Supplies to Huawei Technologies

The U.S. Department of Commerce unveiled a new rule that expands U.S. authority to require licenses for sales to Huawei Technologies of semiconductors made abroad with U.S. technology, according to Reuters, who was the first to report this. The new rule will enable the United States to vastly expand its ability to halt exports to Huawei Technologies.

Part of the wording of the Department of Commerce’s rule says:

The Bureau of Industry and Security (BIS) today announced plans to protect U.S. national security by restricting Huawei’s ability to use U.S. technology and software to design and manufacture its semiconductors abroad. This announcement cuts off Huawei’s efforts to undermine U.S. export controls. BIS is amending its longstanding foreign-produced direct product rule and the Entity List to narrowly and strategically target Huawei’s acquisition of semiconductors that are the direct product of certain U.S. software and technology.

The Commerce Department’s rule, effective Friday but with a 120-day grace period, also hits Taiwan Semiconductor Manufacturing Co Ltd, the biggest contract chipmaker and key Huawei supplier, which announced plans to build a U.S.-based plant on Thursday.

According to Reuters, China’s response to this new rule is that Beijing is ready to put U.S. companies on an “unreliable entity list”. The measure includes launching investigations and imposing restrictions on U.S. companies such as Apple Inc., Cisco Systems Inc, Qualcomm Inc, and the suspension of purchases of Boeing Co airplanes.