The Trump administration decided on Friday to block global chip supply from blacklisted telecommunications equipment giant Huawei Technologies, raising fears of Chinese retaliation and spurring actions by US producers of Chip manufacturing equipment.
New rule, introduced by Commerce Department and first reported by Reuters, expands U.S. authority to require sales licenses to Huawei for semiconductors made overseas with U.S. technology , significantly expanding its reach to stop exports to the second manufacturer. global smartphone.
"This action gives priority to the United States, American businesses and American national security," a senior US Department of Commerce official told reporters on Friday.
Huawei, the world's largest manufacturer of telecommunications equipment, did not respond to a request for comment.
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News of the decision against the company hit European stocks when traders sold the day's earnings, while stocks of chip makers like Lam Research and KLA closed 6.4% and 4.8% lower. . , respectively, in American trade.
China's reaction was swift, with a report released on Friday by the China Global Times indicating that Beijing was ready to place US companies on a "list of unreliable entities" as part of the countermeasures in response. to the new limits. for Huawei.
The measures include the initiation of investigations and the imposition of restrictions on American companies such as Apple, Cisco Systems and Qualcomm, as well as the suspension of purchases of Boeing aircraft, according to the report. told me
Commerce Department rule, effective Friday but with 120-day grace period, also affects Taiwan Semiconductor Manufacturing, Huawei's largest chip maker and key supplier, which announced plans to build a state-owned factory on Thursday -United.
TSMC said on Friday that it "is closely monitoring changes to the United States' export rules" and is working with outside counsel to "conduct a legal analysis and ensure a thorough review and interpretation of these rules ".
The ministry said the rule is intended to prevent Huawei from continuing to "undermine" its blacklisted business status, which means suppliers of sophisticated American-made technologies must seek a license from the U.S. government before sell him. .
"There was a very technical flaw that allowed Huawei to actually use American technology with fabulous foreign producers," Commerce Secretary Wilbur Ross told the Fox Business Network on Friday, calling for the rule change. like "something very personalized". to try to correct this gap. "
The company was added to the Commerce Department's "list of entities" last year due to national security concerns amid Washington allegations that it violated US sanctions against Iran. and could spy on customers. Huawei has denied the allegations.
The frustration of Chinese hawks in the administration that Huawei's list of entities is not doing enough to restrict access to supplies has sparked an effort, first reported by Reuters in November, to crack down on the company that has culminated with the Friday rule.
Washington attorney Kevin Wolf, a former Commerce Department official, said the rule appeared to be a "new and complex expansion of US export controls" for articles related to chips made with American technology abroad and shipped to Huawei. But he pointed out that chips designed by companies other than Huawei and made with U.S. technology could still be sold to the company without a license requirement.
While the new rules will apply to chips regardless of their level of sophistication, a senior US Department of State official who also briefed reporters on Friday opened the door to some flexibility for him. company, echoing the Deferrals granted to Huawei by the Trump administration previously.
"This is a licensing requirement. This does not necessarily mean that things are refused," said the official, adding that the standard gives the US government more "visibility" of shipments. "What is done with these applications, we will have to see … Each application will be judged on its merits."
After essentially prohibiting Huawei from buying from U.S. suppliers, the Commerce Department authorized some of Huawei’s largest U.S. partners to continue selling to the company, while allowing small rural telecommunications companies to continue to sell. buy equipment. Huawei continues to operate its networks. .
Needing semiconductors for its smartphones and telecommunications equipment, Huawei is at the center of a battle for global technological dominance between the United States and China, whose relations have deteriorated in recent months due to origins of the deadly coronavirus.
Although the rule change aims to oust Huawei and affect the chip foundries on which it is based, U.S. manufacturers of chip manufacturing equipment could face long-term difficulties if chip makers develop new sources of equipment outside the scope of US standards.
But so far, most chip makers rely on equipment produced by American companies like KLA, Lam Research and Applied Materials, which have not responded to requests for comment.
While some of the complex tools needed to make chips come from companies outside of the United States, such as Tokyo Electron in Japan and Hitachi and ASML in the Netherlands, analysts say it would be difficult to build a complete tool chain for manufacturing semiconductors. advanced without at least some American equipment.
The burden of managing the new rule is likely to be felt by foundries like TSMC buying the tools, rather than by American semiconductor companies like Qualcomm or Nvidia who take advantage of these foundries as part of their chain of custody. 39; supply.
"We are concerned that this rule may create uncertainty and disruption for the global semiconductor supply chain, but it seems less detrimental to the US semiconductor industry than the approaches very broad previously contemplated, "said the executive director of the Association of the Semiconductor Industry, John Neuffer, in a statement.
US Secretary of State Mike Pompeo said the action was aimed at protecting "the integrity of 5G networks". He added that the rule "helps prevent Huawei from undermining US export controls".
© Thomson Reuters 2020
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