Trump administration will soon begin blocking Huawei’s global chip supply

TSMC and other chipmakers will no longer be able to supply chips to Huawei without first obtaining a license from the U.S.

What you need to know

• U.S. will soon begin blocking shipments to Huawei from global chipmakers.
• The announcement comes just a day after President Donald Trump extended the ban on Huawei and ZTE for another year.
• Huawei could soon lose access to all semiconductors made using U.S. software and technology.

Just a day after the trade ban on Huawei was extended for another year by President Donald Trump, the U.S. Commerce Department has now announced that it is going to soon block shipments to Huawei from TSMC and other global chipmakers.

The U.S. is amending an export role that will enable it to “strategically target Huawei’s acquisition of semiconductors that are the direct product of certain U.S. software and technology.” Since all major chipmakers use American technology, the rule change will have a massive impact on Huawei’s smartphone business. Taiwan’s TSMC, which manufactures Huawei’s Kirin chipsets, will also be affected by the move.

The rule change will make it mandatory for foreign companies using American chipmaking equipment to get a license from the U.S. before supplying specific chips to Huawei or any of its subsidiaries. Since the rule change is specifically targeted at Huawei’s Kirin chips, it won’t be able to get new chipsets tied to U.S. technology without a license from the Commerce Department.

As per Reuters, the U.S. will allow chips that are already in production to be shipped to Huawei or its affiliates within 120 days from Friday. However, the chipsets will have to be in production by Friday to be eligible under the rule.

If Huawei is forced to stop building chips, the entire industry suffers