Huawei logo is pictured on the headquarters building in Reading, Britain July 14, 2020. REUTERS/Matthew Childs - RC2ZSH9VQSUS
Matthew Childs / reuters

This article is based on an article from the Japanese edition of Engadget and was created using the translation tool Deepl.

The U.S. Department of Commerce has announced that it will further tighten the embargo against Huawei. The goal is reportedly to restrict Chinese companies' access to semiconductors involving U.S. technology.

The U.S. Department of Commerce announced in May that it would tighten export controls on Huawei and 114 affiliated companies. The measure builds on a previous ban on exporting semiconductors using U.S.-derived technology to the company, even if they were made in a foreign country. Thirty-eight Huawei affiliates from 21 countries have been added to the Entity List, which bans U.S. companies from trading without government approval.

Secretary of Commerce Wilbur Ross issued a statement saying that the measure is aimed at closing a loophole that Huawei has been exploring. Secretary of State Michael Pompeo hailed the measure as a "direct blow" to the Chinese Communist Party.

In addition, according to the U.S. Department of Commerce, all semiconductor companies that do business with Huawei will be subject to a license (permission to do business with companies on the entity list), no matter where they are located. He added that as long as they use U.S. design software and devices, even foreign companies would be affected. This means that Samsung, MediaTek, and others could also be restricted in continuing to ship to Huawei.

The termination of the temporary general license (TGL), which allows for exceptions to the embargo, was also not withdrawn. The prospect of making it impossible to update the software of Huawei's past smartphones in the future has increased further.

Analysts at JPMorgan pointed out that tighter restrictions on Huawei would be negative for European chipmakers. The main risk, they said, is Chinese retaliatory restrictions on major customer Apple.

On the other hand, some analysts predicted that Apple's total iPhone shipments could drop by up to 30 percent due to the Trump administration's order to ban WeChat, which has made the app an essential platform in mainland China and around the world. The cracks in the U.S.-China relationship may pose an unprecedented pinch for Apple, which has benefited from China as a huge factory and market.

Source: Bloomberg

This article is based on an article from the Japanese edition of Engadget and was created using the translation tool Deepl. The Japanese edition of Engadget does not guarantee the accuracy or reliability of this article.