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Huawei ban tightened to prevent it using US silicon

Image credit: Dreamtimes/Reuters

The US Government has imposed further restrictions on Chinese tech firm Huawei that prevent it from using silicon made by American firms.

The new rules from the commerce department are designed to prevent Huawei from circumventing existing US sanctions according to commerce secretary Wilbur Ross.

“There has been a very highly technical loophole through which Huawei has been able to in effect use US technology,” he said, speaking to Fox Business. “We never intended that loophole to be there.”

Last year the US put Huawei on a blacklist, meaning that American companies that want to sell parts to the Chinese firm will need approval from Washington’s commerce department.

The ban has impacted its smartphone business considerably, with the company predicting a 20 per cent fall in sales of Android devices this year in Western markets.

It has since launched several smartphones that feature no apps made by Google, key services that are considered essential to many consumers.

The new silicon ban has been heavily opposed by China’s commerce ministry which said it was firmly opposed to the move yesterday and will take measures to safeguard the rights and interests of its domestic companies.

In retaliation China is reportedly considering placing US companies on an “unreliable entity list” that could impact firms like Apple, Cisco and Qualcomm.

“The US has utilised national power and used the so-called national security concern as an excuse, and abused export controls to continue to suppress some particular companies in other countries,” China’s commerce ministry said in a statement.

Adam Segal, a senior fellow at the US-based Council on Foreign Relations, said the move “looks like a victory for the people who really want to drive the nail, or what they think will be the nail, in Huawei’s coffin”.

Taiwan Semiconductor Manufacturing Co (TSMC), the world’s largest producer of semiconductors and key Huawei supplier, has stopped new orders from Huawei in response to Washington’s move according to a report from Nikkei.

The orders which TSMC took before the new ban and those already in production are not impacted and could continue to proceed if those chips could be shipped before mid-September, the report said.

Huawei declined to comment, while TSMC said it does not disclose order details and added the report was “purely market rumour”.

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