Trump’s new move on Huawei invites Beijing retaliation
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Taipei — A new US edict limiting Huawei Technologies’ access to technology is more than just an incremental measure against the Chinese telecommunications company. It threatens to kill the company, which invites retaliation from Beijing.
In May, the administration of President Donald Trump mandated that manufacturers globally could not use American technology to produce chips designed by Huawei.
At first, that also threatened chief supplier Taiwan Semiconductor Manufacturing, until it became clear that a legal workaround was available: let Huawei buy chips that it did not design. As a result, Taiwan’s MediaTek stepped into the breach and quickly became the biggest purveyor of 5G smartphone components, which are made by TSMC.
It looked like a win-win for everyone. Washington could curb Huawei’s semiconductor development, and by extension Beijing’s ambitions; Taiwan, a US ally, got a revenue boost; and Huawei itself would still survive even if its technology was hobbled.
But that was not enough for the Trump administration.
On Monday, the US commerce department expanded its foreign-produced direct product rule to include situations “where US software or technology is the basis for a foreign-produced item” that will be used by Huawei, or where the company is party to such a transaction, such as being an intermediary supplier.
This is Trump launching a nuclear warhead aimed directly at Huawei. Secretary of state Mike Pompeo basically acknowledges as much.
There are dozens of steps in developing, manufacturing and installing chips in a device, with US technology an integral part throughout. Synopsys and Cadence Design Systems make software used to design semiconductors; Lam Research and Applied Materials are suppliers of manufacturing equipment — all four companies are based in Silicon Valley.
There are many more American technology providers crucial to the process. Remove just one, and any chip company will struggle to keep up. Removing them all would be akin to cutting off the oxygen. If the new rule is to be strictly interpreted, then even the use of generalist technologies such as PCs running on Microsoft’s Windows and Intel processors could be prohibited.
Huawei might be able to cobble together a patchwork of suppliers that not only are non-American but do not even use US technology. But this backup solution would be far inferior to that available to global peers, and any effort would be full of landmines — even if Huawei does not care about upsetting the US (that horse has ...
In May, the administration of President Donald Trump mandated that manufacturers globally could not use American technology to produce chips designed by Huawei.
At first, that also threatened chief supplier Taiwan Semiconductor Manufacturing, until it became clear that a legal workaround was available: let Huawei buy chips that it did not design. As a result, Taiwan’s MediaTek stepped into the breach and quickly became the biggest purveyor of 5G smartphone components, which are made by TSMC.
It looked like a win-win for everyone. Washington could curb Huawei’s semiconductor development, and by extension Beijing’s ambitions; Taiwan, a US ally, got a revenue boost; and Huawei itself would still survive even if its technology was hobbled.
But that was not enough for the Trump administration.
On Monday, the US commerce department expanded its foreign-produced direct product rule to include situations “where US software or technology is the basis for a foreign-produced item” that will be used by Huawei, or where the company is party to such a transaction, such as being an intermediary supplier.
This is Trump launching a nuclear warhead aimed directly at Huawei. Secretary of state Mike Pompeo basically acknowledges as much.
There are dozens of steps in developing, manufacturing and installing chips in a device, with US technology an integral part throughout. Synopsys and Cadence Design Systems make software used to design semiconductors; Lam Research and Applied Materials are suppliers of manufacturing equipment — all four companies are based in Silicon Valley.
There are many more American technology providers crucial to the process. Remove just one, and any chip company will struggle to keep up. Removing them all would be akin to cutting off the oxygen. If the new rule is to be strictly interpreted, then even the use of generalist technologies such as PCs running on Microsoft’s Windows and Intel processors could be prohibited.
Huawei might be able to cobble together a patchwork of suppliers that not only are non-American but do not even use US technology. But this backup solution would be far inferior to that available to global peers, and any effort would be full of landmines — even if Huawei does not care about upsetting the US (that horse has ...
