The U.S. Department of Commerce has moved on its intent to divide Huawei from its semiconductor suppliers, announcing international manufacturers will need to obtain a license if they trade Huawei-designed chipsets as well as those designs with the company.
Huawei was put onto the Entity List last year over sanction violations and cybersecurity concerns which effectively blocked the company from sourcing U.S.-made products. Contractors have been able to obtain temporary licenses to finish and transition away from business with the Chinese tech giant — the exemptions have been extended four times over the past year, but the department says it has issued its sixth and possibly last extension, set to expire August 13.
Commerce Secretary Wilbur Ross has noted that even with an effective export ban in place, Huawei is still able to use U.S. technology to tailor designs for its HiSilicon chipsets and send them off to manufacturers including Taiwan Semiconductor Manufacturing Company to be produced. The department submitted draft amendments to the Foreign Direct Product Rule in late March.
Reuters reports TSMC, which has plans for building a fabrication plant in Arizona, is receiving legal counseling on how to proceed.
"[The] semiconductor industry supply chain is extremely complex, and is served by a broad collection of international suppliers," the company stated.
Any silicon produced by the end of today can be excepted from the new rules if they are delivered within the next 120 days.
The Chinese government has vowed to retaliate, potentially by subjecting U.S. companies doing business in China like Apple, Cisco, and Qualcomm to increased scrutiny and restrictions and halting large purchases from Boeing. In the meantime, Huawei would be stifled from supplying networking equipment to carriers worldwide and from selling new hardware from smartphones to laptops to smart home appliances.