Sources told Reuters, that under the newly agreed restrictions, any foreign company that uses US chipmaking equipment will be required to get a US license before supplying certain chips to Huawei.
Additionally, the move is said to be an attempt to limit the sale of chips to Huawei by Taiwan Semiconductor Manufacturing Co, the largest contract maker globally.
The US intends to leverage its position, as many chip manufacturers use equipment produced by US companies such as KLA Corp, Lam Research and Applied Materials in its production.
The news is another in a long line of conflict between the US and Huawei. The US added the company to its entity list back in August 2019, banning its citizens from trading with in on the grounds of security.
The US alleges that the company has been including US hardware and software in its products sold to Iran, in defiance of a US embargo, and has also warned of security risks.
But Huawei is fighting back. According to Bloomberg, the tech vendor is ramping up its own chip making capabilities in preparation of the US restrictions.
In Q4 of 2019, the company sold more than 50,000 next-generation base stations, without using US tech.
“It’s still our intention to return to using U.S. technology,” said Tim Danks, a US-based Huawei executive responsible for partner relations. “The longer Huawei goes without access to U.S. suppliers, the more unlikely it is to be able to return to using them.”
If that weren’t enough, last month Huawei chairman Eric Xu, said that 2019 “had been the most difficult year for Huawei”, but added “2020 is going to be more difficult. It will be the most difficult for Huawei.”
But said that the Chinese government “will not stand by and watch Huawei being slaughtered on the chopping board”, he said. “If the US government can arbitrarily change the rules that would be the destruction of the global technological ecosystem”.
