The Department of Commerce has put additional restrictions on Chinese telecom tech company Huawei.
Commerce's Bureau of Industry and Security (BIS) is modifying its rules to strategically target Huawei's acquisition of semiconductors that are the "direct product" of certain U.S. software or technology.
Huawei has been on the BIS Entity List since 2019, meaning companies that wanted to export U.S. tech to the company had to get a license. But Commerce says Huawei has been undermining that restriction by commissioning the production of the same tech overseas using U.S. equipment. Commerce said Huawei is undermining the national security and public policy goals of the Entity List, thus the new, targeted restrictions.
“This is not how a responsible global corporate citizen behaves. We must amend our rules exploited by Huawei," said Commerce Secretary Wilbur Ross Friday (May 15).
The rule change will make the following covered by the restrictions: 1) semiconductor designs from Huawei or its affiliate HiSilicon, which is also on the Entity List, derived from certain U.S. technology; 2) chipsets that are the product of certain manufacturing equipment out side the U.S. if it is clear their ultimate destination is Huawei or any of its affiliates on the Entity List.
Commerce is giving any such tech currently in the pipeline 120 says grace period before the restriction kicks in "[t]o prevent immediate adverse economic impacts on foreign foundries utilizing U.S. semiconductor manufacturing equipment that have initiated any production step for items based on Huawei design specifications."
Commerce has already banned U.S. chip imports to Huawei, but has extended the effective date of that prohibition numerous times.
Congress and the FCC have also teamed up to ban broadband subsidies to any carrier using Huawei tech in their networks.
“The Commerce Department’s new policy is another smart step towards ensuring that our supply chains and, ultimately, our communications networks are secure from Chinese Communist Party interference," said Mike Rogers, chairman of 5G Action Now and former chairman of the House Intelligence Committee. "We must adopt a whole of government approach and look at novel ways of preventing China from dominating the 5G future.”