The U.S. will try to “block” Huawei’s outsourcing chip program

Huawei is in for a hard time with the American government. The company is already facing multiple bans from the U.S. government which is already crippling its smartphone business. The company will not be able to launch another flagship series after the Mate 40 series. This is because it has no means of obtaining befitting flagship processors. In all honesty, we have to give it to Huawei. Despite the U.S. ban, the company is still the largest smartphone brand in the world.

According to a recent report, the Department of Commerce will further tighten the restrictions on Huawei’s access to US technology. The official website of the Department of Commerce shows that it is expanding its foreign direct product rules. The new rules will further prevent Huawei from circumventing US laws. If there is a single bit of American tech on the chip, Huawei can not use it. 

In this ban, the US Department of Commerce has added several new rules. For example, products based on American software and technology cannot be used to manufacture or develop any parts, components, or equipment produced, purchased, or ordered by any Huawei subsidiary (in the entity list). In addition, the regulations also restrict Huawei from participating in related transactions. It can not participate as a “buyer”, “intermediate consignee”, “ultimate consignee” or “end-user”.

If there is an American tec, Huawei can not use it

The Bureau of Industry and Security (BIS) of the Ministry of Commerce announced today that it will further restrict Huawei Technologies (Huawei) and its non-US affiliates on the Entity List from obtaining items produced at home and abroad using US technology and software. In addition, BIS added 38 affiliates of the Chinese maunfacturer to the list of entities. BIS also imposes license requirements on any transactions involving a party on the list of entities. These companies are subject to the export control of the Ministry of Commerce, such as Huawei (whether as the purchaser, intermediary, or end-user). These actions take effect immediately to prevent Huawei from trying to circumvent US export controls to obtain electronic components developed or produced using US technology.

In May 2020, BIS revised the long-standing Foreign Direct Produced Products (FDP) rules to target Huawei’s acquisition of certain US software and technology. Today’s amendment further improves the FDP rules. This amendment further restricts Huawei’s access to foreign-made chips developed or produced using American technology.