Huawei was placed on the 'entity list' in 2019 amid fears it could spy on Americans and allegations it was stealing intellectual property and violating sanctions
Published : 04 Mar 2023, 12:35 PM
US chipmaker Nvidia Corp'splansto sell technology to China's Huawei would be thwarted if theUS government proceeds with a proposal to further restrict shipments to the blacklisted company, adraftreport by a government contractor shows.
The Biden administration has been considering limiting the items it authorisesUS companies to ship to telecoms equipment giant Huawei Technologies Co, which was added to aUS trade blacklist in 2019 but which continuesto receive billions inUS goods under a special plan implemented by the Trump administration.
"The proposed 2023 amendment of (the Commerce Department's) licensing will likely have a high economic impact on Nvidia," according to excerpts of thedraftreport, referring to the company's "pending license value."
Nvidia'splansto sell toHuaweihave not been previously reported.
A Nvidia spokesperson declined to comment on the document, saying: "The China market presents a significant opportunity for theUS semiconductor industry. While we are unable to comment on any pending license requests, we work with customers and partners worldwide to comply with all applicable export controls and meet market demand.”
A senior State Department Official said the document was a preliminarydraftprepared by a contractor, and the department "would not have approved of the report in its current form." It also said the government "has written and contracted multiple reports on this subject, based on different contingencies, which arrive at very different conclusions."
The White House and Commerce Department declined to comment.Huaweidid not respond to a request for comment.
The document shows the Biden administration is seeking to assess the impact onUS companies of proposedHuaweipolicy changes before imposing new rules that could crimp projected revenue streams at a time when the tech industry is already reeling. It also provides unusual insight into the politically sensitive question of whichUS companies are seeking business ties toHuawei, one of Washington's most penalised Chinese companies.
Reuters could not learn the details of the specific policy change whose impact was being assessed in the report.
The report suggested Qualcomm would likely suffer a "moderate economic impact" from the change in policy, in contrast toHuawei. Indeed, the loss of access to Qualcomm's modem chips would have a bigger impact onHuawei, the report forecast, sinceHuawei"relies heavily on Qualcomm's modem chips to support its smart phone offering."
Qualcomm did not respond to a request for comment.
Reuters reported in 2021 thatUS officials had approved license applications worth hundreds of millions of dollars forHuaweito buy chips for its growing auto component business, including vehicle components such as video screens and sensors, as trade restrictions crippled other business lines.
Huaweiwas placed on the "entity list" in 2019 amid fears it could spy on Americans and allegations it was stealing intellectual property and violating sanctions. TheUSrequires that suppliers seek a special license that is usually denied when sellingUS goods to companies on the list. But the Trump administration instituted a more lenient policy forHuawei, blocking its access to 5G chips but allowing other items like 4G chips to be shipped to the firm.
The Commerce Department's top export controls official, Alan Estevez, said this week the Trump-era policy allowingUS technology below the “5G level" to be shipped toHuaweiwas "under assessment."
But sources say there are differences within the administration odds over how far to go: some officials advocate blocking all licenses toHuaweisuppliers and revoking existing authorizations, while others want to extend restrictions only to 4G chips and other targeted technologies going forward.