U.S. Moves to Cut Off Chip Supplies to Huawei

By Katy Stech Ferek

The Trump administration announced a new export restriction on Friday designed to cut off Chinese telecom-equipment maker Huawei Technologies Co. from overseas manufacturers who supply semiconductors.

The restriction stops foreign semiconductor manufacturers whose operations use U.S. software and technology from shipping products to Huawei without getting a license from U.S. officials first.

That new license authority could give the Commerce Department the ability to block the sale of semiconductors manufactured by Taiwan Semiconductor Manufacturing Co., for Huawei's HiSilicon unit, which designs chips for the company.

Commerce officials have worked on the new restriction for months.

The restriction further tightens the U.S. export-control system's existing rules related to Huawei. Washington alleges that Huawei gear could be used by Beijing to spy globally, which Huawei has repeatedly denied.

Huawei didn't immediately respond to a request for comment on the new restriction.

A year ago, Commerce Department officials put Huawei on an export blacklist that they keep of companies considered to be national-security threats. That move was designed to cut Huawei off from some U.S. semiconductor makers, but some manufacturers later found loopholes in the rule that enabled them to resume shipments, frustrating some Trump administration officials.

"This is not how a responsible global corporate citizen behaves. We must amend our rules exploited by Huawei and HiSilicon and prevent U.S. technologies from enabling malign activities contrary to U.S. national-security and foreign-policy interests," said Commerce Secretary Wilbur Ross in his announcement of the new rule.

(END) Dow Jones Newswires

May 15, 2020 08:37 ET (12:37 GMT)

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