The Trump administration believes that Huawei equipment poses a security threat to the US as China could be using the equipment to to spy on the US, allegations Huawei has firmly denied. The newly announced sanctions were designed to close any loopholes in previous restrictions imposed by Washington as it cracks down on Huawei and other Chinese technology groups. The new rules will ban the sale without a licence of any chips made using US technology in transactions that involve Huawei. Which threaten Huawei’s chances of survival by blocking Huawei from global supply chains. Huawei’s operations in the US could cripple far much worse than before. The sanctions have continued to be tightened since 2019. The industry executive says, only three companies in the world make that software, known as electronic design automation, that makes the semiconductors and all are subject to U.S. export controls because of their U.S. operations. The telecom’s staff described it as a “state of war” in the company, with the new restrictions threatening to cut off the supply of semiconductors that Huawei needs to power its 5G telecoms, smartphone and other businesses. “Our company has been urging us to get used to this state of war,” said an employee in the company’s research and development department. “But we’re still worried. Will our benefits be sacrificed, will the lay-offs finally land on me?” The telco had previously found ways around the restrictions, that enabled it to report sales growth and bolster its large domestic market. Huawei reported a 13.1 per cent year-over-year revenue growth in the first half of 2020, amid the sales shrinkage due to the ongoing US sanctions and the COVID-19 pandemic around the world. With the newly imposed rules it will require manufacturers to get a license even if they are selling chips that were not designed by Huawei but are intended for Huawei’s use. In the ruling, 38 new Huawei entities were added to the trade blacklist, including many of Huawei’s cloud-computing subsidiaries around the world. Industry officials have raised concerns, saying this new rules will cut Huawei off from most chips made worldwide because semiconductor factories can’t escape using U.S. software and equipment in their production process. Thus “This kills Huawei,” said one industry executive, according to the post. “Any chip made anywhere in the world by anyone is subject to this.” The Semiconductor Industry Association criticized the latest measure.“We are still reviewing the rule, but these broad restrictions on commercial chip sales will bring significant disruption to the U.S. semiconductor industry” ” We are surprised and concerned by the administration’s sudden shift from its prior support of a more narrow approach intended to achieve stated national security goals while limiting harm to U.S. companies,” the group said. While Huawei has been working on its own software, there are still key processes required in making its own semiconductors.
