U.S. pushes to cut off Huawei’s chip supply chain Media exposes Chinese counterattack list

During the global epidemic, the US Trump administration has tried to attack China by all means. In March of this year, the United States called for an attempt to cut off Huawei’s chip supply chain and highlighted TSMC. Reuters 15 latest news, the current U.S. Department of Commerce at the expense of the interests of U.S. enterprises also want to advance the process, with the intention of Huawei “card neck”.

Chinese sources told the Global Times that if the U.S. side eventually implements the above plan, China will counterattack strongly or involve U.S. companies such as Qualcomm, Cisco, Apple and Boeing.

15 days before the opening of U.S. stocks, the above-mentioned four U.S. companies share price volatility, including Qualcomm fell more than 7% in 2 hours, Cisco, Apple, Boeing are down more than 4%. Currently, all four companies have seen their share prices narrow and rebound.

Boeing, Cisco, Qualcomm, Apple share prices fluctuate pre-market

According to Reuters 15 exclusive report, the U.S. Department of Commerce said it is changing an export rule to Huawei’s chip suppliers for a “strategic lock,” as long as these suppliers’ direct products to the United States certain software or technology.

Under the rule change, even if the chips are not U.S.-developed designs, foreign companies must obtain a U.S. government license to supply chips to Huawei or its subsidiary HSI Semiconductor, among others, as long as they use U.S. chip-making equipment. Huawei’s continued acquisition of certain chips or use of certain U.S. software or technology-related semiconductor designs also requires a license from the U.S. Department of Commerce.

In addition, the report highlights TSMC, Huawei’s main chip supplier, saying the US move will also hit TSMC. TSMC is also a chip supplier to Huawei rivals Apple and Qualcomm.

Recently, the Global Times reporter learned from Chinese government sources that if the U.S. side finally implements the above plan, the Chinese side will be strong counterattack to safeguard its own legitimate rights and interests. Specific counter-opposition options available to China include the following: the inclusion of U.S.-related enterprises in China’s “list of unreliable entities”; the restriction or investigation of U.S. enterprises such as Qualcomm, Cisco and Apple in accordance with laws and regulations such as the Cybersecurity Review Measures and the Antimonopoly Law; and the suspension of Boeing aircraft purchases.

The U.S. Department of Commerce claims that Huawei is using U.S. software and technology to design semiconductors, even though it has been added to the “list of entities”. U.S. Commerce Secretary Wilbur Ross claimed in a statement that the rule change was to “prevent ‘malicious’ U.S. technical support activities that are contrary to U.S. national security and foreign policy interests,” and that Huawei and its affiliates had increased their “sabotage” of that effort.

The U.S. Commerce Department said the regulation would allow wafer substrates already produced to be shipped to Huawei within 120 days from the same day (15th). The chips need to be in production by 15 days or they will not be eligible for production under the regulations.

In March this year, the United States began to call for a rule change to try to cut off Huawei’s global chip supply chain. A source told Reuters at the time that the rule adjustment was mainly to restrict sales of cutting-edge precision chips to Huawei, rather than older, more commercial and more popular semiconductors.

U.S. expert Jin Canrong previously said that if the rule is implemented, it will be another substantial escalation of the U.S. Department of Commerce’s crackdown on Huawei’s global chip supply chain, following the inclusion of Huawei in the “list of entities” in May last year.

However, the move is not only a crackdown on Huawei, but also a blow to American companies. Trade attorney Doug Jacobson said, “The negative impact on U.S. businesses will be far greater than Huawei’s because Huawei will develop their own supply chain … eventually Huawei will find an alternative.”

At the same time, U.S. companies remain dependent on Huawei. According to Reuters, the current U.S. Department of Commerce has renewed Huawei’s temporary license, which was scheduled to expire on May 15, allowing the U.S. company to continue doing business with Huawei until Aug. 13.

The U.S. Commerce Department also warned that this is expected to be the last extension. In fact, this extension is the sixth in a row for the U.S. Department of Commerce.

As we all know, in 2019 so far the United States has continued to suppress Huawei through various means, but Huawei 5G market orders are still the number one in the world. In contrast, the United States, the recent Boston Consulting Group released the “restrictions on trade with China will end the U.S. semiconductor leadership” report pointed out that in May last year, “entity list”, the U.S. ranking of leading semiconductor companies, the median revenue per quarter have fallen 4% to 9% range.

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