US ramps up Huawei attacks with new restrictions on tech exports

The US is ramping up its economic attacks on Huawei, the Chinese electronics giant.

In response to US directives, Taiwan Semiconductor Manufacturing Co Ltd (TSMC), the world’s largest semiconductor manufacturer, will no longer supply Huawei, the world’s largest telecommunications equipment maker.

Taiwanese giant TSMC controls more than 50% of the global semiconductor market and has produced advanced semiconductors for Intel, AMD, Apple and Qualcomm.

A new rule, unveiled by the US Commerce Department on Friday, expands US authority to require licences for sales to Huawei of semiconductors made abroad with US technology.

The move comes after the US government’s Bureau of Industry and Security announced strict rules that effectively cut Huawei, its chip design wing HiSilicon, and its numerous subsidiaries, off from a chunk of the world’s semiconductor supply chains, says The Register.

Explaining the crackdown on semiconductor supplies, US Security of Commerce Wilbur Ross previously said: “We must amend our rules exploited by Huawei and HiSilicon and prevent US technologies from enabling malign activities contrary to US national security and foreign policy interests.”

TSMC announced plans to build a US-based plant on Thursday, and on Friday added it was “following the US export rule change closely”.

China has been desperately trying to develop its own semiconductor industry and recently announced a new US$29 billion incentive scheme to further encourage local research and development.

Yet despite decades of financial support, the local semiconductor industry has not caught up with the US and is not likely to do so any time soon.

TSMC joins South Korean giant LG who can no longer supply display panels to Huawei.

The Chinese giant may soon have even more trouble sourcing components for its phones. According to South Korean newspapers, Samsung and memory manufacturer SK Hynix plan to suspend selling parts to the Chinese company on Sept 15, the day the new US Commerce Department restrictions go live.