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Musing on Huawei
 
US Government Looking at Restricting Huawei to Semiconductor Merchants
February 23, 2020

Huawei’s position on the Department of Commerce’s Entity List, may get worse, as the Trump administration keeps trying to intervene in the company’s affairs with non-US companies, according to Reuters. The newest measures against Huawei, which have reportedly been drafted but are still far from being approved, might come in the form of a modification to the Foreign Direct Product Rule, which oversees foreign-made goods based on American technology. Under this proposal, foreign companies using American chipmaking equipment would need to seek a license from the US government before supplying equipment to Huawei. TSMC is just a manufacturer, and is Huawei themselves, through its subsidiary HiSilicon. So, can they just go to another chipset maker, such as Samsung Foundries? The answer is — it’s complicated. The new measure is not specific to any company in particular, and if Samsung Foundries is using US chipmaking equipment, then they would also be affected by this change. It is almost certain, however, that Huawei would have a hard time going forward if this change is approved, as the same report takes cognizance of a claim that there are no production lines in China that use only equipment made in China, making it difficult to produce any chipsets without U.S. equipment.