Senior officials in the US government agreed to new measures to restrict the global supply of chips to Huawei Technologies, sources familiar with the matter told Reuters. Under the proposed rule change, foreign companies that use US chipmaking equipment would be required to obtain a US licence before supplying certain products to Huawei.
The move comes as ties between Washington and Beijing grow more strained due to the coronavirus pandemic, with both sides trading barbs over who is to blame for the spread of the disease. The Chinese telecoms company was blacklisted last year already, limiting American suppliers from doing business with Huawei.
One of the sources said the rule-change is aimed at curbing sales of chips to Huawei by Taiwan Semiconductor Manufacturing Co, a major producer of chips for Huawei’s HiSilicon unit, as well as the world’s largest contract manufacturer.
It is unclear if President Donald Trump, who appeared to push back against the proposal last month, will sign off on the rule change, the report said. A person familiar with the matter said the US government has gone to great lengths to ensure impacts on US industry will be minimal.
Most chip manufacturers rely on equipment produced by US companies such as KLA, Lam Research and Applied Materials, according to a report last year from China’s Everbright Securities. The equipment makers did not immediately respond to requests for comment.
