The US Commerce Department has confirmed the amendment of an export rule with the specific purpose of restricting Huawei’s ability to use US technology and software to design and manufacture its semiconductors abroad. In a statement, the department said the amendment to the longstanding foreign-produced direct product rule is designed to “cut off Huawei’s efforts to undermine US export controls” and to “narrowly and strategically target Huawei’s acquisition of semiconductors that are the direct product of certain US software and technology.”
The move confirms several recent reports suggesting the US government was taking steps to inhibit Huawei’s ability to source semiconductor components for products such as base stations and smartphones. In its statement, the Commerce Department said the rule will allow semiconductors already in production to be shipped to Huawei as long as they are “reexported, exported from abroad, or transferred in-country by 120 days from the effective date [15 May]”.
The department's confirmation also comes a day after Taiwan Semiconductor Manufacturing (TSMC) announced plans to build a USD 12 billion chip factory in Arizona. Prior to the announcement, TSMC had reportedly been lobbying the Trump administration to drop its plans to require an export license for chips shipped to Huawei produced using US-designed tools.
In a separate statement, the Commerce Department said it was extending a temporary general license (TGL) that was set to expire on 15 May to allow US companies to continue doing business with Huawei. The 90-day extension lasts until 13 August but the department warned that this may well be the final of several reprieves it grants. “Activities authorised in the TGL may be revised and possibly eliminated after 13 August 2020,” it said, adding that “companies and persons relying on TGL authorisations should begin preparations to determine the specific, quantifiable impact of elimination if they have not done so already.”
