US Seeks to Strangle Huawei
On May 15, 2020, the US Department of Commerce's (DOC) Bureau of Industry and Security (BIS) announced plans to restrict Huawei’s ability to utilize American technology and software in its semiconductor development abroad. In response to the action, the government in Beijing is reportedly considering placing restrictions on US technology companies operating in China, such as Qualcomm and Apple.
In a statement, the DOC declared that the regulations are an attempt to, "narrowly and strategically target Huawei’s acquisition of semiconductors that are the direct product of certain U.S. software and technology.” Although previous regulations sought to target and limit Huawei's use of American the technology in its production line, the Chinese tech giant has proven adept at circumventing traditional supply chains, and thus has maintained its forward growth.
The move comes after President Trump extended an executive order that bans US telecommunications companies from utilizing equipment that poses a national security threat, mainly from ZTE and Huawei. At the same time, the Department of Justice has increased legal pressure on Huawei by charging the tech company with steeling trade secrets from American firms like AT&T and T-Mobile. In the diplomatic realm, the US has attempted to stop allied and partner nations using Huawei equipment. This has had mixed results, with Australia and Japan banning equipment from the company, while the United Kingdom has agreed to partially include Huawei in its 5G network development program.
Certainly, the DOC's action will escalate the ongoing Cold War between the United States and China. Growing anti-China sentiment, combined with decades of distrust, will fuel Washignton to ramp up the pressue of Huawei, and in turn the Chinese government and Chinese Communist Party.
In related news, the Taiwanese tech conglomerate Taiwan Semiconductor Manufacturing Company (TSMC) has announced plans to build a new manufacturing plant in Arizona in response to US pressure, signaling the American campaign has had an impact on the semiconductor community