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According to sources from Reuters, the US is going to limit the number of chips supplied to Huawei. The idea is minimising their opportunities for espionage. According to the US, the Chinese company is building functionality for that into their applications.

As a result of new regulations, foreign companies using American chips would have to apply for a US license. Only then can they provide certain chips to Huawei. In this way, it will be more difficult for Huawei to obtain American hardware indirectly (from other, foreign vendors outside the US). The Chinese company was already blacklisted in the US last year, which severely limited the number of American suppliers of the company.

One of the sources reported that the measure is specifically aimed at Taiwan Semiconductor Manufacturing’s sales of chips to Huawei. That company is a major supplier of chips to Huawei’s HiSilicon division. According to Reuters, if U.S. President Trump were to give the OK on the proposal, it could deliver an extra blow to U.S. companies in an already rather desperate economic situation, due to the corona virus.

Technical specifications still unknown

It is not yet known exactly which chips will be covered by the license. Therefore, it is also not yet clear which companies and which hardware will be affected. One of the sources did say that the rule only applies to advanced chips, not to older chips that are already widely available.

“It’s impossible to tell the impact until we know the technical thresholds that may apply,” Kevin Wolf, a former Commerce Department official, said to Reuters.